Wednesday's Small-Cap Winners & Losers

Small-cap stocks traded lower Wednesday, under pressure from the rest of the suffering market, despite substantial gains at small health-care companies.

Minneapolis-based Urologix (ULGX Quote) catapulted more than 18% after Feltl & Co. began coverage on the medical-equipment maker with a buy rating. Usana Health Sciences (USNA Quote) said second-quarter earnings jumped 20% year over year to 66 cents a share, or $11.3 million, on 18.3% higher revenue to $109.4 million -- better than Wall Street estimates, according to Thomson Financial. The Salt Lake City-based company also upped its full-year earnings guidance. Shares bounced 13.4% to $46.93.

Inspire Pharmaceuticals (ISPH Quote), a drugmaker based in Durham, N.C., was another small-cap health winner. Shares leapt 21.4% after announcing that private-equity firm Warburg Pincus will buy $75 million in exchangeable preferred Inspire shares at $5.35 each. Inspire said proceeds will go to AzaSite commercialization and several late-phase development programs, among other things. Shares were gaining $1.09 to $6.18.

On the downswing, however, were a couple of small financial firms. NovaStar Financial (NFI Quote) plummeted 20.4% after a Friedman Billings analyst said its equity investment deal with a group led by MassMutual and Jefferies, announced late Monday, might not be enough to keep the struggling subprime-mortgage lender afloat. Shares were down $1.45 to $5.66.

Credit Suisse meanwhile lowered ACA Capital (ACA Quote) to neutral from outperform, citing subprime-related risk. Shares of the New York-based company were down 16.3% to $6.82.

And I2 Technologies (ITWO Quote) lost 11.1% after the Dallas-based business-software firm said that "significantly lower platform technology bookings," among other things, will probably push full-year earnings under prior guidance of 90 cents to $1.10 a share, on a GAAP basis. Non-GAAP 2007 earnings were previously pegged at $1.25 to $1.45 a share; analysts are looking for $1.28. Moreover, second-quarter sales should come in below the average target. Shares were changing hands at $15.09.

More broadly, the Russell 2000 plunged 1% to 841.62 as the S&P SmallCap 600 gave up 0.8%.