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Small-cap stocks remained unsettled this morning, unable to embrace Friday’s rescue plan package as equity markets around the world seized up and credit pipelines remained clogged despite massive additional liquidity injections this morning by the Federal Reserve. At 9:50 a.m. ET, the Russell 2000 (NYSE:IWM) was down 19.38, or 3.13%, at 600.02, slipping to the lowest point on intraday charts since May 2005.

In Europe, extraordinary measures were taken over the weekend on the banking front, with France’s BNP Paribas buying assets of beleaguered Fortis, while in Germany a rescue deal for Hypo Real Estate was sweetened by another 15 billion euros of liquidity, adding to an earlier pledge of 35 billion euros.

Everyone has been talking about the Federal Reserve slicing the Fed funds rate, but that rate has already been trading well below the current 2% rate in the market. This morning, the Fed increased the size of its cash auctions and also offered banks interest accrual on reserves. Stock index futures did pull off the overnight lows heading into the open on the Fed injection news, but the inability to stabilize financial markets in the direct aftermath of the $850 billion financial bailout bill Friday reflects just how deep the crisis is running.

Looking at market action around the world, European shares were off nearly 5% into the U.S. stock market opening. Elsewhere, Russian stocks tumbled some 15%, prompting various exchange trading halts. Japan was down 4.9%, Hong Kong off nearly 5%, China down 5.1%, Taiwan down 4.1%, Australia off 3.3%, Singapore down 5.6%, South Korea off 4.2% and India down 5.7%.

Market research experts at Goldman Sachs slashed their economic forecast for growth and interest rates “substantially” in a report issued Friday afternoon. Goldman said “The recession that we have been forecasting now looks likely to be deeper and longer, taking the unemployment rate to 8% by late 2009 and pushing the . . .

Small-cap stocks are expected to open sharply lower, pressured by concerns about the global credit contagion and a leap in unemployment claims to seven-year highs which completely offset any optimism tied to the Senate’s approval vote for the financial rescue plan. The Russell 2000 (NYSE:IWM) is expected to open about 1% lower, which would translate to an open near 664.50.

The weekly claims report came in at 497,000, which was way above the forecast of 468,000. In addition, the government revised last week’s number slightly higher. The somber claims figure will only sour the mood in front of Friday’s big monthly Labor Department report on payrolls and the unemployment rate.

The Senate passed the rescue plan by a vote of 74 to 25, and the revamped bill will now move over to the House for a vote, which will likely take place Friday. With the addition of tax cuts and FDIC bank deposit measures, the House is expected to pass the bill.

If the jobs report Friday comes out with bad news (like another rise in the unemployment rate), it would be hard to anticipate that the House would be willing to risk not passing the $700 billion bailout.

The Senate was expected to pass the revamped “Paulson Plan” rescue bill, and in a classic case of “buy-the-rumor, sell-the-fact” stock markets around the world did not stage an immediate relief rally on the Senate’s OK. European shares . . .

Small caps opened mostly flat, as Fed Chairman Bernanke, Treasury Secretary Paulson, and SEC Chairman Cox testify before Congress on the $700 billion mortgage bailout plan and the recent market turmoil.

At 10:10 a.m. ET the Russell 2000 (NYSE:IWM) was up 12.43, or 0.20%, to 721.87.

Fed Chairman Bernanke, Treasury Secretary Paulson and SEC Chairman's Cox all began testifying before the Senate Banking Committee at 9:30 a.m. ET. The market remains skittish and skeptical, as the administration’s officials paint the details of the plan and what dire consequences could result should Congress opt not to pass the bailout. In a prepared statement for the panel Bernanke said, “If financial conditions fail to improve for a protracted period, the implications for the broader economy could be quite adverse.”

The plan, in which the government would take ownership of all toxic mortgages from affected banks’ balance sheets, effectively rids banks of the poison that has thwarted their operation and enables them to begin shoring up their financial positions to begin lending again. Recent reception has been hostile by certain members of congress. The two most contentious areas include limiting executive compensation and amending the bankruptcy law to allow judges to change the terms of the toxic mortgages. One area of agreement is broader congressional oversight and taking equity stakes in firms which partake in the rescue efforts.

Today will be a day of waiting and listening. Some investors are concerned the plan could get hung up in Congress’ halls, while others remain curious about many of the plan’s details.

In its latest efforts to further shore up ailing banks, the Fed loosened the rules surrounding the ability of buyout shops and private investors to take stakes in them. This is a testament to the level of apprehension regulators have about banks’ liquidity positions.

Overseas, China’s market jumped a hefty 7.8%, as regulators took . . .

Small-cap stocks tried in vain to dodge some serious data land-mines Thursday as investors anxiously await the big data bomb released with Friday morning’s employment report. Amid choppy seas, the Russell 2000 (NYSE:IWM) eventually finished down 4.34, or 0.60%, at 714.52, unable to shrug off dreadful unemployment claims, soft GDP numbers and a cautious tone from former Federal Reserve Chairman Alan Greenspan.

Day traders looking for a definitive direction in small caps today may have gotten a little seasick as the market see-sawed up and down, carried on the whims of economic data crunchers. The opening salvo (and the most dynamic move of the day) was a bearish tilt as weekly unemployment claims went through the roof. Although the survey period for Friday’s monthly jobs report was over before this week’s claims survey, it’s not exactly reassuring to see unemployment numbers spike way beyond expectations.

Just how bad was the claims report? The number came in at 448,000, swamping the forecast for a dip to 395,000 following last week’s already uncomfortably big 404,000 figure. To give it a little better perspective: it was the largest one-week claims figure for any week, of any month, in more than five years. If nothing else, the weekly claims report certainly shot more holes in Wednesday’s ADP employment report, which forecast job growth, nevermind recent reports of layoffs in financial and . . .

It’s been a rollercoaster ride thus far for small caps, most recently trending deeper into the red along with the S&P 500 and the Dow after a gloomy weekly unemployment claims report and a weaker-than-expected read on GDP dragged equities lower. 

At 12:46 p.m. ET, the Russell 2000 (NYSE:IWM) was down 3.44, or 0.48%, at 715.42, while the Dow down 0.98%, or 113.01, at 11,470.68.

The weekly claims number, reported this morning, spiked more-than-expected to 448,000 from last week’s 404,000 level. The claims number, which was substantially above the median forecast of a decline to 395,000, was pushed higher by an emergency unemployment program. The number was the single largest weekly claims figure in more than five years. Although this survey was taken after the numbers were collected for Friday’s monthly employment release, it has heightened jitters ahead of the Labor Department’s release tomorrow. 

The second-quarter number for GDP, also out this morning, wasn’t comforting either. The nation’s domestic growth clocked in at 1.9% for the second quarter, below the forecast of 2.3%. Additionally, GDP for the past 3 years was revised downward. Fourth quarter GDP was reduced to minus 0.2%, the first decline in quarterly GDP since 2001.

"The revisions were ugly and will fuel the recession debate," Andy Busch, global foreign exchange strategist for BMO Capital Markets, said in an email. "Today's numbers were a big disappointment and will rev up the doom-gloom crowd to call for the end of the world. July was brutal. Let's hope we can focus on the Olympics -- I'm still expecting/hoping to see a stabilization occur in August without the massive swings July presented."

Although the weak GDP number and claims took the limelight today, there was some hopeful economic news in the abyss. The Chicago Purchasing Managers report came in stronger than expected. PMI was 50.8, above the forecast of 49 and above 50 for the first time since January.

For the first time in awhile, gyrations in crude oil prices were not the focal point. Crude sold off this morning, after spiking over $4 Wednesday, and continues to tread in the red. A barrel of light sweet crude slipped $2.40 to roughly $124 mid-session.

The economic reports managed to smother uplifting merger and acquisitions news. Bristol-Myers Squibb Co. (NYSE:BMY) made a bid to acquire ImClone Systems Inc. (Nasdaq:IMCL) ...

Small-cap stocks mounted a valiant comeback push after sinking 1% shortly after the opening, as tech stocks pushed higher, Chicago PMI beat the forecast and merger deals helped offset gloom tied to terrible weekly unemployment claims. At 10:00 a.m. ET, the Russell 2000 (NYSE:IWM) was down 3.25, or 0.45%, at 715.62. The tech-laden Nasdaq 100 was up 0.3%.

The weekly claims number came in at 448,000, far beyond the median forecast of 395,000, and a big jump from last week’s 404,000 number. How bad was this number? It was the single largest weekly claims figure in more than five years. Even though this survey was taken after the numbers were collected for Friday’s monthly employment release, it certainly won’t raise investor confidence about the labor market ahead of that release. It also will call into question some of the rise powered by Wednesday’s ADP employment report. The claims numbers were boosted by an emergency unemployment program, but even allowing for some data quirks, it’s a sobering report that does not paint a rosy picture of the labor market right now.

Most people came in to today’s session expecting the GDP report to claim top billing on the data slate, but economic growth was clearly upstaged by the weekly unemployment report. As for GDP, it was also a disappointment, as the headline figure came in at 1.9%, below the forecast of 2.0%. In addition, fourth quarter GDP was revised downward to minus 0.2%, the first decline in quarterly GDP since 2001.

Before the numbers came out, the stock market was higher in overnight trading, but the claims report sparked an abrupt 11-handle slide in S&P 500 futures, and triggered a big slide in the U.S. dollar and in Treasury yields. The yield on the benchmark 10-year note was down more than 2% into the stock market open, which suggested money flow away from equities toward safe-haven products. The dollar was down more than 100 basis points against the euro, slipping 0.7% after the . . .

Small-cap stocks are expected to open lower, pulled down by a stunning jump in weekly unemployment claims, which jolted investors a day ahead of the monthly employment release. The Russell 2000 (NYSE:IWM) was up about 0.3% before the claims number was released, but now is expected to open down 0.5%, which suggests an open near 715.00.

The weekly claims figure shot to 448,000, which was way above the forecast of 395,000. In fact, it was the largest weekly claims figure in more than five years. The immediate response to the number was a rise in Treasury products, a slide in the U.S. dollar and a whopping 11-handle decline in S&P 500 futures.

At the same time that the weekly claims figure came out, the GDP report also was released. The headline number for GDP came in at 1.9%, which was below the forecast of 2.2%. While GDP also was a disappointment, the fury behind the slide in stocks and the dollar was clearly fueled by the weekly claims shocker.

Crude oil prices stalled overnight, and were down about $0.60 a barrel near $126 heading toward the U.S. open. Energy prices shot $4 dollars a barrel higher Wednesday afternoon on a surprising drop in gasoline stocks seen on the weekly storage data, but that move appears to have lost momentum early today.

There is a potpourri of big-name stocks in the news this morning, with some 40 of the S&P 500 slated to release earnings today. In the financial arena Prudential Financial Inc. (NYSE:PRU) rallied some 5% overnight as losses from subprime . . .

Shares of Vical Inc. (Nasdaq: VICL) are sagging despite news this morning that the San Diego-based pharmaceutical company has been awarded a three-year, $6 million grant from the National Institute of Allergy and Infectious Diseases (NIAID) for a DNA vaccine manufacturing process.  Shares are down $0.05, or 1%, to $4.95.

Shares of Repligen Corp. (Nasdaq: RGEN) are trading higher following news this morning that the Waltham, Mass.-based pharmaceutical company has received a favorable ruling from the U.S. District Court for the District of Massachusetts on a patent infringement lawsuit involving ImClone Systems Inc. (Nasdaq: IMCL).