Wednesday's Small-Cap Winners & Losers

Updated from 2:49 p.m. EDT

A series of analyst upgrades sent various small-cap stocks climbing Wednesday, with Rock-Tenn(RKT Quote) leading the way.

The paper products company surged 12.3% after Deutsche Securities raised its rating to buy from hold and set a price target of $40 a share. Rock-Tenn closed up $4.02 at $36.60.

Rock-Tenn, a component of the S&P SmallCap, provided support to the index, which was 0.6% higher at 436.25.

Other small-cap names rising on positive analyst notes are Euroseas(ESEA Quote), which Oppenheimer raised to buy from neutral, up 3.9%; Unica(UNCA Quote), which Ferris Baker Watts raised to neutral from sell, up 5.4%; Rosetta Resources(ROSE Quote), which Matrix Research raised to strong buy from buy, up 2.8%; and Greenbrier(GBX Quote), which DA Davidson raised to buy from neutral, up 4.1%.

In M&A news, Digital Music Group(DMGI Quote) climbed more than 12% after the music distributor agreed to a merger with The Orchard Enterprises. The combined company will be called The Orchard and will retain DMGI's listing on the Nasdaq. Digital Music was up 49 cents at $4.48.

On the flip side, shares of Flanders(FLDR Quote), which makes air filters, fell 12.8% on news a manufacturing facility in Bartow, Fla., was completely destroyed by fire today. The company said it expects to be able to absorb the loss of capacity by a production shift to other plants, but warned "there may be a short-term disruption of supply." Shares fell $1.02 to $6.95.

Several small-cap mortgage names were sent reeling Wednesday, after the Mortgage Bankers Association released the latest mortgage application data, which showed mortgage applications increased during the holiday-shortened week ended July 6 but of that, activity in adjustable-rate mortgages fell off sharply.

Trading lower were American Home Mortgage(AHM Quote), down 12.3% at $15.15; Home Solutions of America(HSOA Quote), down 7.1% at $5.34; and Alesco Financial(AFN Quote), down 4.8% at $7.34.