Like a middle school high jumper, companies are getting plenty of credit this earnings season for clearing very low bars.

At its heart, the goal of a covered-call strategy is to lower our cost basis by generating income through the selling of call options while hedging against a pullback in the stock you own.

For the first time ever, online ad sales are projected to overtake print in 2012. Here are the tech stocks that will benefit most.

A rally in the face of negative press is bullish. The optimism could be short lived, but the bullish momentum remains despite gloomy news reports.

With weak earnings from the banks and minimal economic data to embrace, I took a bearish position yesterday.

Shares of tech stock Microsoft (Nasdaq: MSFT) are up 2% today on news that the company has promoted two executives to help improve the software giant’s footprint in the smartphone and electronic tablet markets.

With the U.S. Treasury having its credit rating slashed, Treasury Bonds aren't the low-risk investment they once were. Here are four dividend stocks that are safer, and more profitable, investments.

Groupon (Nasdaq: GRPN), the online leader in daily coupon deals, launched the largest IPO by a tech stock since Google (Nasdaq: GOOG) raised $1.7 billion in its 2004 stock market debut.

I don't know when I'll sell my gold for sure, but I know what I'll be looking to buy when I do.

Jack Ma, the chairman of the Chinese Internet conglomerate Alibaba Group, said last week that he is "very interested" in buying Yahoo! Inc. (Nasdaq: YHOO).

The market was slammed yet another time yesterday. Although unlike Thursday and Friday, the indices recovered into the close.

Once again financials led the charge lower and the big banks like JPMorgan Chase (NYSE:JPM), Bank of America (NYSE:BAC), Goldman Sachs (NYSE:GS) and Citigroup (NYSE:C) were down 3%. Energy and technology components were also hurt and stocks like Microsoft (NASDAQ:MSFT) and IBM (NYSE:IBM) were down 1% and Exxon Mobil (NYSE:XOM), Apache (NYSE:APA), Continental Resources (NYSE:CLR), which we're short, and Halliburton (NYSE:HAL) were down 2%.

It's always nice to know that stocks can actually rally. And seeing stocks build on their gains throughout the day is a bonus.

Yesterday's rally appears to be a mix of relief and short-covering. For instance, I suspect the move for Citi (NYSE:C) was helped along by shorts saying "enough is enough" and covering their downside positions.

You'll notice that Bank of America (NYSE:BAC) finished in the red, though off its' early lows. Investors are still bearish on banks.

Growth forecasts for the U.S. are being drastically cut after yesterday's disastrous Philadelphia Fed manufacturing survey. Economists predicted slight expansion, instead we got the worst reading since March of 2009.

JP Morgan (NYSE:JPM), who just cut its GDP forecasts, cut them again. And the cuts are big. From 2.5% to 1% in the 4th quarter and from 1.5% to 0.5% in the 1st quarter of 2012.

Citi (NYSE:C) was less dramatic, cutting 2012 growth from 2.7% to 2.1%. Citi also cut earnings estimates for the S&P 500 by around 4%.

In 2008, we knew that the mortgage-backed securities depleted the cash reserves at banks to the point that they were insolvent. In January of 2010, it was the uncertainty of Greek sovereign debt along with other European countries that caused a very sharp pull back for stock prices.

But it's more difficult to find a culprit for the declines we've seen lately.

Yes, there have been weakening economic data, to the point that GDP growth may be below the 2% line. That's close enough to negative growth that some are throwing around the "r" word: recession.

For the second time in a week, we had a "margin call" day. That's what I've started to call those days where the market sells off steadily all day, because it's as if the market itself received a margin call, and has to sell stock relentlessly, regardless of fundamentals.

Now, since I mentioned fundamentals, that's the place to begin our discussion of what's happened to the stock market lately - and what we should be doing about it.

As I wrote yesterday, analysts and strategists alike are on record saying they do not want to lower earnings forecasts for stocks. They typically cite the fact that companies have steadily grown earnings, even when economic data weakens, like last summer, when economic data was so weak, the Fed began the bond buying program known as QE2.

The market weakened a little more on Tuesday, but the indices stabilized and kept the decline to a minimum. Volume levels were low as SPX consolidated at 1332 support. The industrials were hit the hardest and financials showed unusual strength. Large cap technology also continued to motor higher as stocks like HPQ, AAPL GOOG and MSFT rallied nearly 1%.

The TradeMaster portfolio was active again yesterday. On Monday a Chinese stock and RCMT were added to our long positions. Yesterday, F and another small cap stock were added, but F was a short.

Ford announced its second quarter results Monday before the market opened. Financial results were solid and EPS beat analyst expectations. And shares gapped 2% higher to begin the session. But high volume sales immediately dropped shares back to $13.15 from $13.44 intraday highs.

It's probably no surprise that Apple (Nasdaq:AAPL) beat earnings expectations last night. After all, Steve Jobs is an egomaniac who reportedly always under-promises so he can enjoy the attention when he over-delivers. It's good showmanship, and good for a pop in the stock.

Still, the results were impressive. Net earnings beat by nearly $2 a share ($7.79 vs. $5.87 expected) and sales came in $3.6 billion better than expected at $28.6 billion. Apple sold 20.3 million iPhones and 9.3 million iPads.

Perhaps even more amazing, Apple added $10 billion to its cash hoard during the quarter. It now has $76 billion.

The market pulled back last week and volume started to creep back up. It was an options expiration week which typically will be a higher volume week. Despite the 2% decline, all indices held their must hold support levels: SPX 1301, Nasdaq 2700 and Russell 800.

 The bulls will need to protect those support levels through a barrage of data that is scheduled for this week. First, the U.S. debt ceiling talks will intensify as the deadline for default gets nearer. In fact, Treasury Secretary Tim Geithner was on CNBC talking the debt ceiling this morning. Additionally, U.S. earnings season hits full stride this week. Major blue chips like Apple (Nasdaq: AAPL), Microsoft (Nasdaq: MSFT), GE (NYSE: GE), IBM (NYSE: IBM), Intel (Nasdaq: INTC) and McDonald's (NYSE: MCD) report second quarter earnings results this week. Along with the U.S. debt ceiling debate - and earnings results - will be the usual heap of economic data and the daily dose of European debt woes.

Well, Alcoa (NYSE:AA) managed to meet on earnings, and beat on revenue. All in all, I'd say that's pretty good. I'll also say it's a darned good thing Alcoa came in good. After a day like yesterday, investors needed some good news, or at least some "not bad" news.

The S&P 500 dropped below support at 1,320, though only by a point. Volume wasn't particularly heavy, so we shouldn't read too much into the 1,319 close. In fact, yesterday had all the makings of a bear trap: negative headlines, a drop through support, right at the outset of earnings season.

Of course, we will need to get some more positive earnings news to turn the tide. And we will have to wait for Thursday when JP Morgan (NYSE:JPM) and Google (Nasdaq:GOOG) report.

Now, here's some reader mail.

The ADP Payroll report is out – and it is bad. As in, not at all good. Not even a little. According to payroll processing firm ADP, payrolls in the U.S. rose by 38,000. Expectations were a bit rosier, at 170,000. Some sources were even looking for 190,000.

 

This sure doesn’t bode well for Friday’s Non-Farm payroll number. 180,000 jobs are expected for May. We’ll see if the government statisticians can pull a rabbit out of Uncle Sam’s hat. It would seem unlikely.

The market slowly went higher yesterday, but the move was hardly bullish. Volume ran low as SPX moved up towards 1332 resistance. Technology bounced back with Microsoft (Nasdaq: MSFT) leading the way.

The U.S. dollar and Treasury bonds are weaker today after the Group of 8 said the global economy was growing and the perception of Greek debt problems improved.

 

As we know, a weaker dollar sets the stage for higher stock and commodity prices. Oil is perhaps the best indicator of economic growth expectations. And its inverse correlation to the U.S. dollar is also airtight. So much so, that if you see oil rally, bullish economic commentary is usually not far behind.

Hedge fund heavyweight David Einhorn, of Greenlight Capital, is vocally calling for the Microsoft (Nasdaq:MSFT) Board of Directors to fire CEO Steve Ballmer.

Einhorn owns 9 million shares of Microsoft, and believes it is Ballmer's fault that Microsoft carries an ultra-low valuation. After all, under Ballmer's tenure, Microsoft has missed opportunities in tablets, smart-phones, Internet search and cloud computing.

Investors have moved on to technology companies that remain cheap on a valuation basis, but are still at the forefront of the tremendous growth for wireless devices and cloud computing.

Ian Wyatt, of Wyatt Investment Research, is currently recommending a $6 stock that’s about to unleash a revolutionary wireless antenna technology that will save Verizon and AT&T hundreds of millions of dollars in network upgrade costs. In fact, these antennas are so powerful that that they don’t need new cell towers to be built.

"23.3 million people bought an iPhone or iPad handheld wireless device In the first 3 months of 2011," said Wyatt. "And because these devices require lots of bandwidth to bring the Internet right to the user, wireless service providers like Verizon or AT&T have to spend billions to upgrade their networks. That includes adding antennas."

Ian has a $10 target for this stock, but says it could easily rise even more than 65%. If you’re ready, I’ll fill you in on the details right now…simply click here.

Yesterday, we talked about bubbles and tech stocks. While it's possible to argue that certain sub-sectors of the Nasdaq may have some bubble-like valuations, technology blue chips are definitely not in bubble territory.

As I noted, the Nasdaq 100 (NDX), which is comprised of the 100 largest companies on the Nasdaq, is currently trading with a trailing P/E of 12.5, according to the Wall Street Journal.

The pundits agree. It's a technology bubble. And all because social media stock LinkedIn (Nasdaq:LNKD) now trades with a P/E of 600 on a paltry $15 million in trailing earnings.

It was somewhat lost in the shuffle in Wednesday. Investors were so stunned at Fed Chief Ben Bernanke's admission that commodity inflation might accelerate over the next few months before the Fed is forced to act on interest rates, they missed the part where the Fed lowered its 2011 GDP growth estimates from a range between 3.4% -- 3.9% to 3.1%.

For anyone pinning his or her hopes on 3.9%, that's got to be disappointing.

But after yesterday's first read of Q1 2011 GDP growth -- a measly 1.8% -- investors are likely to take another look at the total message delivered by the Fed.

The market continued its sideways move yesterday and banged-up against 1335 resistance for most of the afternoon. Over the past three sessions the market has been stuck in a four point range and

For an economy that has been highly dependent on government and corporate spending, Chambers' outlook wasn't very encouraging. But on a day when Cisco was pounded for around 15%, and Google (Nasdaq:GOOG), Microsoft (Nasdaq:MSFT) and Apple (Nasdaq:MSFT) all finished in the red, the Nasdaq as a whole actually posted a gain.

Now, Apple alone accounts for 20% of the Nasdaq 100 (the 100 largest stocks on the Nasdaq). Throw in Google (4.2%), Microsoft (3.6%) and Cisco 1.6%, and you're looking at 30% of the Nasdaq 100. Nearly one-third of the Nasdaq 100 was lower on Thursday, easily the most influential tech companies, and the Nasdaq managed a gain for the day.

So, a headline on Yahoo! Finance today read “Nokia, Microsoft in pact to rival Apple, Google.” Apparently, Nokia (NYSE:NOK) and Microsoft (Nasdaq:MSFT) are feeling the heat for missing the smartphone boom and so they are going to team up to go after the leaders in the space.

Now, to me, this is the equivalent of the Carolina Panther teaming up with the Cincinnati Bengals in order to compete with the Green Bay Packers. It’s just not going to work. Two companies that have completely failed to have any semblance of market awareness simply aren’t going to suddenly morph into a cutting edge technology giant.

I've found and interesting small cap company operating in the mobile technology industry - one that stood out from the pack because it has morphed two trends into one business model for those on the go.

But there's a catch: This microcap company is looking to make money by giving away their products.

In difficult economic environments, when the stock market seems to move with little rhyme or reason, investors will sometimes say "it's a stock pickers market."

The idea of a "stock picker's market" is that of a trendless market, but one where you can still buy quality, undervalued stocks and make money.

But according to the Wall Street Journal, that's not what we have right now. And investors who are relying simply on a company's fundamentals to invest are not being rewarded with profits.

Positive results for second quarter earnings have pushed the S&P 500 to the support/resistance point at 1,115 yesterday. And it looks as though that level will fall easily today.

FedEx (NYSE:FDX) doesn't report until September 16, but the company was kind enough to raise its earnings guidance yesterday, and that helped encourage investors that the global economy is improving.

Shipping stocks are always a good measure of economic activity. When business is growing, more packages are sent and shippers do well. And so, along with recent positive results from UPS (NYSE:UPS), FedEx's preannouncement is great news.

It looks as though the tone of earnings season has taken a bullish turn. Weak earnings from banks, along with a couple revenue misses had investors on edge.

But yesterday's decidedly positive results from Caterpillar (NYSE:CAT), 3M (NYSE:MMM) and UPS (NYSE:UPS) sparked a big rally. And positive earnings from Microsoft (Nasdaq:MSFT), Verizon (NYSE:VZ) and Ford (NYSE:F) look like they will extend the rally.

Bloomberg reports that 85% of S&P 500 companies that have reported have beaten earnings estimates.

Intel's blowout earnings report last night is certainly making it look as though earnings estimates were revised too low for corporations. And so the overwhelmingly pessimism that drove stocks lower since early May seems to be shifting to optimism that maybe things aren't that bad after all.

Intel's second quarter EPS were $0.51 on revenue of $10.8 billion. Those numbers crushed the analyst expectations. Analysts wanted $0.43 with $10.3 billion in sales. Guidance was also way above expectations. Intel's management expects third quarter revenue of $11.6 billion from $11 billion.

CEO Paul Otellini made sure to let analyst know during the conference call that this quarter was the best quarter in the company's 42 year corporate history.

As the Chief Investment Strategist of SmallCapInvestor.com, Ian Wyatt has guided thousands of individuals in their quest to capture small-cap investing success. With the release of his new book, The Small-Cap Investor: Secrets to Winning Big with Small-Cap Stocks, Wyatt continues his dedication to help investors find great companies at bargain prices before Wall Street or Main Street catch on.

Learn more about The Small-Cap Investor: Secrets to Winning Big with Small-Cap Stocks today by clicking here.

Small-cap stocks, those publicly traded companies with market capitalizations less than $2 billion, can yield significant gains that are impossible to find when investing in larger stocks. The best performing investments of all-time started out as small-cap stocks, including Cisco (Nasdaq: CSCO) +94,983%, Dell (Nasdaq: DELL) +61,025%, Microsoft (Nasdaq: MSFT) +50,209%, and Wal-Mart (NYSE: WMT) +79,016%.

Following an economic recession, small-cap stocks have proven to consistently perform better than large-cap stocks. A recent study from Merrill Lynch found that in the 18 bear markets since the 1930's, small caps posted an average gain of 41.4% in the 12 months after the end of the decline, compared with an average gain of 32.4% for large caps. This impressive performance makes small-cap stocks among the most attractive investments after a financial downturn.

Unfortunately, information about how to successfully invest in these smaller companies has been hard to find-until now.

Throughout The Small-Cap Investor, Wyatt clearly outlines his proven investment process and the systems that are involved - detailing eight straightforward steps readers need to take to find, research and analyze small-cap stocks that could have big gains. Page by page, he takes the time to explain the essential criteria involved in picking the right stocks and timing buy/sell decisions. Topics include:

• Identifying growth trends and market sectors positioned for rapid growth in the years to come
• Secrets for finding undiscovered small caps before they are embraced by the financial media and institutional investors
• Understanding the fundamentals of a potential investment, including products, services and management's ability to run the business
  

By following Wyatt's eight-step process outlined in The Small-Cap Investor, you'll have the edge over other investors and be in a better position to profit from the exponential growth of the right small-cap companies. For more information on Wyatt's book visit SmallCapBook.com.

Ian Wyatt is the founder of Business Financial Publishing and author of the book "The Small-Cap Investor: Secrets to Winning Big with Small-Cap Stocks." You can learn more about his book at http://www.smallcapbook.com and follow him on Twitter at @IanWyatt.

Today was options expiration and it made for dull trading. The S&P 500 finished up 2.74 at 921, the Dow Industrials finished down 16.85 at 8,538XXX. The Nasdaq was the strong index, it finished the day up 19.75 at 1,827 on a Goldman Sachs (NYSE:GS) upgrade of Microsoft (Nasdaq:MSFT). 

Oil prices fell below $70. But even better, gasoline futures dropped below $2 after inventory data showed a huge surplus. That suggests prices at the pump may start to head lower.

Large cap oil stocks like Exxon-Mobil (NYSE:XOM) and Chevron (NYSE:CVX) were down in the 1% range, but several micro-cap oil & gas exploration stocks were up. Brigham Exploration (Nasdaq:BEXP) was up 4.36%, Kodiak Oil (AMEX:KOG) was up 7% and Cano Petroleum (AMEX:CFW) was up 3.5%.

The Russell 2000 finished much like its large-cap brethren, with a minimal 3.16 point gain.

Top small cap winners for the day included TerreStar (Nasdaq:TSTR) up 30%, Sealy (NYSE:ZZ) up 20.5% and Smith and Wesson (Nasdaq:SWHC) up 21.9%.

Small cap decliners of note include A-Power Energy (Nasdaq:APWR) down 12%, E*Trade (Nasdaq:ETFC) down 11% and Cost Plus (Nasdaq:CPWM) down 13%.

So now the government is actually going to subsidize car sales with up to $4,500 in incentives for car buyers who get rid of cars that get 18 mpg or less.  

I understand that the auto industry is hurting. And I also get that more efficient cars help reduce our dependence on foreign oil. But is it appropriate to use tax payer dollars to fund auto purchases?  

Perhaps if we were talking about something that is a necessity, like farming, subsidies make some sense. After all, we need farmers. I think we have to consider cars a luxury, or at least a discretionary purchase.  

Not only that, but a car subsidy can only create temporary demand. And given the precipitous drop in car sales (10 million vehicles will be sold this year as opposed to 16 million in 2007), it's highly unlikely any momentum can be created. Not with unemployment on the rise. And not with home values still falling.  

*****Increasing demand based on stimulus spending is a temporary fix. The government is just buying time hoping that the economy will recover. But many of the signs of recovery are based in stimulus spending.  

*****Analysts are now acknowledging that oil has been rallying on a falling dollar and on expectations of price inflation. Of course, the potential for price inflation is, once again, directly related to government stimulus spending.  

The massive amounts of Treasury bonds that have been and will be sold are boosting interest rates and driving the value of the U.S. dollar down. So any asset priced in dollars is rising in price. Like oil. Mind you, that doesn't mean its value is rising, just its price.
 
At some point, higher oil prices will affect the prices of other goods. But as I've noted before, it's likely to be a while before producers are able to raise prices in the current economic environment. Remember, it wasn't until 2007 that inflation really started to become an issue.  

*****Another catalyst for commodity prices in general is supply. Global demand is down, credit has been difficult to get, and miners and producers have not been investing in increasing supply.  

That sets the stage for supply/demand imbalances when economic growth returns.  
We'll be discussing these topics and our bullish outlook for commodity stocks in next Wednesday's Video Conference. It's titled Inflation Busters: Discover the Stocks to Grow and Protect Your Wealth and will air on Wednesday, June 24 at 6 pm. It's free to attend, you can sign up HERE.  

*****Jason Cimpl, technical analyst at TradeMaster Daily Stock Alerts, has his latest video chart analysis ready for you. Last Friday, Jason absolutely nailed this week's trading. I hope you find this week's analysis just as useful. Here's the LINK.  

Small-cap stocks continued to alternate up and down days, with today being a designated “down” day for the market. Selling interest was stoked by terrible results for technology maven Microsoft and by a batch of fresh economic data that suggested the recession is still clouding the outlook. The Russell 2000 (NYSE:IWM) closed down 13.92, or 3.05%, at 442.85, and is now down 11.3% for the year. Meanwhile, the Dow is off 7.4% for the year while the S&P 500 is down 8.3%. Losses in small caps were much deeper than for the big-name companies, which reflects a “big is safer” mentality in play right now for investors.

The market appeared in decent shape ahead of the opening today, with surprisingly stout profit numbers from Apple ramping up enthusiasm on the technology side of things. What’s more, the market was coming off the best one-day performance of the New Year, showing a nice ability to shrug off the worst daily performance on Tuesday. However, the market has been unable to sink its teeth into a dominant trend, and once again alternated a winning day with a losing battle.

In a way, the lack of trend conviction for the overall market mirrors an elongated trading range pattern that has been in place ever since the market bottomed back in November. Recent downside probing and the relative ease with which support has been dispatched is alarming, and opens the door to retest the lows, but it also cements the sideways consolidation consistent with an extended recessionary period.

And it doesn’t exactly help inspire bullish confidence when the profit reports are sketchy and the economic data is bleak. There is a train of thought that says the market can now look past weak data because it’s already priced into things; while the historic evidence might support that theory, it’s easier said than done . . .

Small-cap stocks remained solidly lower into mid-session, pulled down by renewed worries over the economy and a dreary profit report from key firm Microsoft. The slide was relatively broad-based, with energy and financial companies taking a bit hit today. At 1:21 p.m. ET, the Russell 2000 (NYSE:IWM) was down 15.82, or 3.46%, at 440.94.

Small caps slipped down near 435 for the intraday low, so the bounce back up to 440 was a decent silver lining in today’s storm clouds. Still, the chart picture has rolled over into a bearish posture within the elongated sideways consolidation, which heightens the risk for a hard retest of the bear market bottom set back in November. It should be noted that there is very little convincing support below 440; so sustained action below that point would clear the way for a run down to the next big support level at 416. If the Russell can stage an afternoon bounce, resistance is at 450 and 453.50.

Looking at today’s sector activity, financial and bank stocks were once again getting drummed and tech stocks were struggling in the wake of Microsoft Corp. (Nasdaq:MSFT) posting disappointing quarterly results ahead of schedule earlier this morning. Elsewhere on the S&P groups, insurance stocks, construction firms, motorcycle manufacturers and real estate investment trusts were attracting heavy selling interest. The only spots of strength were health-care providers, health-care facilities and retail drug stocks. Even in a bad economy, people need drugs and health care.

The market was able to meander along this week focused primarily on earnings reports, but today ushered in the first meaningful economic data of . . .

Small-cap stocks took a dive on the opening, pulled down by gloomy economic data and also by worrisome profit numbers from Microsoft and Nokia, which pulled the rug out from under good news from Apple. At 9:52 a.m. ET, the Russell 2000 (NYSE:IWM) was down 13.83, or 3.03%, at 442.93.

On the economic data front, housing starts and permits tumbled to a record low in December, with starts sinking 15.5% to an annual unit rate of 550,000, well below the projection of 610,000. The year-over-year decline in starts and permits was the lowest since January 1991.

“Housing starts plunged again in December, their sixth consecutive decline that has pulled starts to record low levels,” Steven Wood, chief economist with Insight Economics, said in an email. “Substantial declines in single family starts over the past two years have helped home builders bring inventories of unsold new homes down significantly. However, those inventories are still elevated because sales of new homes have also fallen sharply. With sales very weak, the credit market still dislocated, and lending standards staying very tight, single family housing starts will remain low for an extended period of time. Housing's contribution to economic growth will be significantly negative again in Q4. The silver lining is that with housing starts now off more than 75% from their peak, housing construction should be getting close to a bottom,” Wood said.

Weekly claims jumped 62,000 last week, rising to 589,000 which was way above the forecast of 553,000. In addition, the number of Americans filing for continuing benefits rose to 4.607 million, which also was above expectations. Stock index futures clearly pulled lower off the gloomy economic data, while yields on Treasury products went lower and prices for interest rate futures rose — all of which reflect money . . .

Small-cap stocks are expected to open lower, pressured by slumping equity markets around the world overnight, with Europe off some 2% and emerging markets down 3%. Bank stocks, mining companies and oil services shares were soft overseas, flashing a broad-based show of weakness, but stock index futures bounced solidly off the morning lows when a key technology firm raised guidance this morning. Stock index futures were off about 1% ahead of the opening, which suggests the Russell 2000 (NYSE:IWM) will open near 447.

The PPI report headline figure came in at minus 2.8%, which was a much bigger decline than the forecast of 1.8%. Stock index futures were in the midst of a hard bounce off the lows ahead of PPI, and pulled back slightly after the inflation headlines. Now that the PPI data is out of the way, investors await an appearance on Capital Hill from Treasury Secretary Henry Paulson and Federal Reserve Chairman Ben Bernanke, slated to begin around 9:30 a.m. ET.

Looking at market activity around the world, Japan was down 2.2%, Hong Kong off 4.5%, China down 7.4%, Taiwan down 3%, Australia off 3.2%, South Korea down 4% and India off 3.8%.

On the individual company scene, there were some pockets of bullish news this morning.
Hewlett-Packard Co. (NYSE:HPQ) jumped more than 10% after the firm raised guidance, which has been unheard of in this difficult environment. Clearly, stock index futures bounce off the lows on the HPQ news. In other corporate news, Yahoo Inc. (Nasdaq:YHOO) showed double digit advances overnight on news that the . . .

Small-cap stocks retained modest losses into midday trading, unable to join large-cap indices in positive territory as worries about a global recession and slumping corporate profits continue to spark flight out of equities. An upside surprise on new home sales helped put some enthusiasm back into things, but it wasn’t enough to generate a complete turnabout in choppy trading. At 12:36 p.m. ET, the Russell 2000 (NYSE:IWM) was down 5.07, or 1.08% at 466.05.

Technology shares continued to lag the Dow and S&P 500, but not to the same extent as the Russell 2000. Tech stocks were weighed down by concerns about spending for technology in a growth-challenged global environment and by reports of loans for technology coming into default problems. Tech bellwether Microsoft Corp. (NYSE:MSFT) was down 3.2% and was one of the bigger drags on large caps.

Commodity stocks were also on wobbly footing so far today, pressured by a soaring U.S. dollar and by fears that a slowdown would crimp demand for physical goods, especially if China begins to see dramatic slowing. Crude oil prices tumbled to a 17-month low earlier today but trimmed losses as the equity market in the U.S. stabilized without too much downside probing.

Looking at broad sector activity today, insurance companies, tire and rubber stocks, coal, investment banks, office electronics, home furnishings, steel and oil exploration shares were among the worst performers. On the upside, agriculture products, regional banks, education services, telecoms, general merchandise and department stores were the top draws.

Looking at individual small caps of note, Calgon Carbon Corp. (NYSE:CCC) was down 24%, sinking to fresh 52-week lows. Telefonica De Argentina (NYSE:TAR) was off 26% as South American ADRs continue to struggle amid pension fund troubles in Argentina and worries about the sharp drop in commodity values. On . . .

Small-cap stocks have sunk mid-session, as the market continues to await details of the proposed government bailout plan and the new banking landscape on Wall Street. 

At 12:38 p.m. ET, the Russell 2000 (NYSE:IWM) was down 19.09, or 2.53%, at 734.65.

Though when initially announced the bailout was cause for celebration on Wall Street, as traders wait for the details of the deal the bears have found their place again. The administration’s leaders on the bailout plan have been meeting with congressional leaders today, who support the plan. President Bush said that failure to act on the bill would have broad consequences beyond just the pain on Wall Street, but that he was confident the legislation would move forward. Treasury Secretary Henry Paulson and Fed Chairman Ben Bernanke are expected to brief Congress on the economy Wednesday.

“Last time I checked, there’s no provision in the U.S. constitution to turnover the country’s check book to one plan, one department, and one man,” BMO Capital’s Andy Busch said in an email. “This is a huge leap of faith and I suspect that leaders of Congress and the Presidential candidates will urge caution or act cautiously. This is the time for action, but not the time to essentially restructure the entire financial system of the country that has worked well up until we had 1% interest rates. There are other solutions and ideas that need to be considered. Remember, this is not an RTC type situation where the government already had the bad assets put to them via the FDIC and then had to figure out what to do. This is a takeover of choice.”

In the mean time the banking landscape continues to change on Wall Street. Investment banks Goldman Sachs (NYSE:GS) and Morgan Stanley (NYSE:MS) said Sunday that they will be converted into commercial banks effectively ending Wall Street’s legacy of independent investment banks. The move will create easier access to credit, will enable them to better organize their assets as well as shore up their leveraged and riskier businesses in light of the now dead short-term financing markets. Investment banks thrived off of short-term financing for the past five years. Now that the leverage is obsolete, the oxygen is gone and the banks have no choice but to change their ways or to cease to exist.  The new move; however, will also create greater oversight from the Federal Reserve.

“It will be interesting to see whether Goldman and Morgan continue in the top ranks of businesses we historically have associated with investment banking,” said Bill Wilhelm, equities professor at the University of Virginia’s undergraduate business school and co-author of the recent book Investment Banking: Institutions, Politics and Law. ...