Small-cap stocks extended the morning slide into midday action, with losses in financial, homebuilder, technology and retail stocks more than offsetting gains in energy and mining shares. At 12:17 p.m. ET, the Russell 2000 (NYSE:IWM) was down 11.57, or 2.43% at 465.19, with small-caps pacing the overall stock market declines.

Ongoing concerns about the economy and credit crunch weighed on financial and bank stocks, with small banks and financial firms dominating the list of percentage losers. For example, small-cap bank Citizens Bancorp (OBB:CZNB) was off 22%, giving back recent gains on a bank stock that hardly ever trades any volume. Among the larger, more recognizable bank names, the story was still the same. Citigroup Inc. (NYSE:C) was down 2.3% while Bank of America Corp. (NYSE:BAC) was off 2.6%.

Homebuilder stocks have been interesting to watch for the last few weeks as investors try to gauge whether or not an explosion in refinancing activity suggests the housing crisis is near or at the bottom. So far today, homebuilder shares have been out of favor: the ISE Homebuilders Index was down 1.7% at mid-session and has slipped 18% since making 5-week highs on Dec. 18. Small-cap homebuilders on the slide so far today include Centex Corp. (NYSE:CTX), down 5.5%, and KB Home (NYSE:KBH), off 4.1%.

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