Wednesday's Small-Cap Winners & Losers

Updated from 2:45 p.m. EST with new stock prices

On what started as a rough day for Wall Street, small-cap stocks rallied late. Optimism for the bond insurers and homebuilders failed to offset poor guidance in the broader financial sector. The Russell 2000 rose 3.3% to 693.43, while the S&P SmallCap 600 gained 3.3% at 362.03.

First Cash Financial Services (FCFS Quote), an Arlington, Texas, pawnbroker, plummeted to new lows, losing 34.1% to $9.28, on Tuesday evening's report of a weak fourth quarter. The company posted adjusted earnings of $5.7 million, or 18 cents a share, vs. $9.7 million, or 27 cents a share, in 2006. Analysts polled by Thomson Financial were expecting 38 cents a share. To make matters worse, First Cash Financial lowered guidance for 2008 to $1.17 a share to $1.20 a share. The Street is looking for $1.51.

Mortgage insurer MGIC (MTG Quote) climbed after the Milwaukee company announced Tuesday evening that losses incurred in the fourth quarter stemming from delinquent loans would be about $1.3 billion. For 2008, the company now anticipates a paid loss ranging from $1.8 billion to $2 billion. Shares rose 0.3% to $16.10 on the news.

Meanwhile, bond insurers Security Capital Assurance (SCA Quote) and Ambac (ABK Quote), which have recently been pummeled by mounting concerns about their viability, recovered a bit on the possibility of further capital infusions or other strategic alternatives. Shares of Hamilton, Bermuda-based Security Capital Assurance jumped 76.3% to $3.79, and New York-based Ambac rallied 71.9% to $13.70.

The homebuilders, another beleaguered sector to see some light, rallied in the wake of the Federal Reserve's surprise decision Tuesday to cut the fed funds target rate by 75 basis points. Scottsdale, Ariz.-based Meritage Homes (MTH Quote) rose 25.4% to $10.78, and Red Bank, N.J.-based Hovnanian (HOV Quote) rose 24% to $8.11.