Small stocks underperformed the broader market for the second straight session Thursday even as several companies rode high on various good news.

One of the day's best performers was Dusa Pharmaceuticals ( DUSA), lately rocketing 57% in extremely heavy trading after the Food and Drug Administration granted "orphan drug" status to Levulan, the Wilmington, Mass., biotech's proposed therapy for esophageal dysplasia. The disease sometimes occurs in patients with Barrett's esophagus and is a high-risk possible precursor to esophageal cancer.

Orphan drug designation, given to promising drugs for treatment of rare diseases, allows for seven years of marketing exclusivity on FDA approval as well as possible grants and tax incentives during the developmental stage. Dusa shares surged $1.58 to $4.35.

Nextar Broadcasting ( NXST) also came out on top amid news it's considering selling itself, having retained Goldman Sachs to review this and other strategic alternatives. The Irving, Texas, TV broadcaster surged 20.1% to $13.08.

Massachusetts-based TechTarget ( TTGT), which operates a network of information-technology-products Web sites, jumped 16% to $15.08 following its 7.7-million-share initial public offering.

A couple of small names meanwhile fired up on positive analyst calls. Information-technology company Stanley ( SXE) leapt 9.7% to $17.71 after Wachovia upped it to outperform on the heels of impressive fiscal fourth-quarter results, and Lehman Brothers began coverage on Input/Output ( IO) with an overweight rating. The company, which sells seismic products and services to the oil-and-gas industry, recently added 3.4% to $14.23.

I/O lent support to the S&P SmallCap 600, but the index was still off 0.4% at 425.17. The Russell 2000, for its part, gave up 0.5% to 816.45 even as one of its components, Geron ( GERN), jumped 14.1% in a flurry of trading after the biotech announced a new medical breakthrough in its diabetes-related stem-cell research. Shares were trading at $9.40.

Among S&P SmallCap members on the downswing, however, online music purveyor Napster ( NAPS) fell 8.3% to $3.73 after the Los Angeles-based company estimated next-quarter sales of $31 million -- $3.5 million below consensus -- even though it bested Thomson Financial's Wall Street predictions for continuing-operations losses in its most recent quarter.

Elsewhere, semiconductor Opnext ( OPXT) sank 9.1% to $11.50 even as it topped income targets for the fiscal fourth quarter and predicted in-line revenue for the next. Roadside-services company Pointer Telocation ( PNTR) traded down 12.1% to $10.20 after reporting a first-quarter loss against the sole analyst's call for a profit.

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