Small-cap stocks underperformed the broad indices Monday and were recently sliding along with the rest of the market, even as a number of names dispatched good news.

Among the biggest gainers was California's

A.P. Pharma


, which soared 17.5% to $2.35 after saying it believes it has regained compliance for listing on the


, having recently completed a 24.4 million-share public offering.

Unix-software technology company


( SCOX), of Lindon, Utah, jumped 11.8% to $1.42 after announcing that Indian state Madhya Pradesh has chosen its SCO Mobile Server to develop and deploy online government services.

Alternative-energies company



was sharply higher on word of a joint venture with meat purveyor

Tyson Foods

(TSN) - Get Report

, shares of which were recently flat at $23.07. The companies will form Dynamic Fuels for production of "ultra-clean, high quality, next generation renewable synthetic fuels" that will use a patented Syntroleum technology and feedstock to be supplied by Tyson.

Syntroleum gained 34 cents, or 12.3%, to $3.10, in support of the Russell 2000, but the tracker lately lost 1.1% to 825.31 as the S&P SmallCap 600 shed 1%.

Another Russell 2000 member,

True Religion Apparel


, flew higher after an analyst with CIBC World Markets upped the Vernon, Calif., jeans maker to sector outperformer, citing well-focused management and "much improved" nondenim products. Shares lifted by 8.8% at $21.37.

Elsewhere, real estate investment trust

America First Apartment Investors


agreed to sell itself to an affiliate of Sentinel Real Estate for an all-cash premium of $25.30 a share, or about $532 million including debt assumption. Shares gained 10.9% to $25.

On the flip side,

U.S. Energy Systems

( USEY) plummeted 40.1% after spelling out troubling developments at its U.K. operations, including a predicted 2007 shortfall of up to $3.2 million at the unit. Without financial restructuring, says the company, it won't be able to complete expansion of U.K. Energy Systems, meet operating requirements or satisfy certain imminent contractual obligations.

The company plans to engage independent advisors in order to evaluate "potential refinancing or restructuring transactions as well as other strategic alternatives." Chief executive of the subsidiary, Grant Emms, was suspended with pay pending an internal review, to be replaced by Joseph Reynolds in the interim. Shares of the New York-based company were off 91 cents to $1.36.


Fuwei Films

(FFHL) - Get Report

shares also were pummeled on news that 53% holder Jun Yin, as well as Duo Wang and Tongju Zhou -- who jointly own 14% of the company -- are involved in an investigation by the Chinese Communist party. The plastic-films maker believes this involves an ongoing financial dispute between Weifang Neoluck Group -- of which all three individuals are former management executives -- and a certain Chinese asset manager.

Fuwei said the individuals are not involved in the company's day-to-day operations and that there is no current reason to believe that Fuwei will be hurt by the inquiry. Still, shares slid 90 cents, or 12.6%, to $6.25.