Small-cap stocks spent Wednesday in the green along with the rest of the market, partly on the power of a couple of upgrades.

Blockbuster ( BBI) jumped 8.9% to $4.30 after Citigroup upped its rating to buy from hold. The analyst cited the video-rental outfit's plan to cut prices for online orders vs. in-store rentals, which he said could allow for a price increase on the company's Total Access program. The program allows customers to rent movies online for a monthly fee and return them to a Blockbuster store.

Caraustar Industries ( CSAR), a Georgia-based paper-products maker, was upgraded to neutral from reduce at UBS. Shares soared 14.9% to $5.95 in support of both the Russell 2000 and the S&P SmallCap 600, which were surging 1.3% and 1.2%, respectively.

Ditech Networks ( DITC), also a component of both indices, climbed 6.4% to $8.18 after the Mountain View, Calif., telecom-equipment maker said it will buy back up to $60 million of its shares.

CytRx ( CYTR) rode high after the Los Angeles biotech announced it has been preliminarily added to the Russell 3000 index. Shares bounced 35 cents, or 9.8%, to $3.94.

On the other hand, managed-care provider HealthSpring ( HS), plunged 15% to $19.44 after lopping at least 20 cents off its 2007 per-share earnings guidance. The Nashville, Tenn., company now expects $1.20 to $1.35 a share (including 6 cents in special charges), and blames this on higher-than-expected medical costs in the second quarter. On average, analysts polled by Thomson Financial are looking for $1.59 a share.

HealthSpring tugged down the Russell 2000, along with plastic-resins purveyor A. Schulman ( SHLM), business-software firm Epiq Systems ( EPIQ) and pharmacy-services company Option Care ( OPTN), which were all knocked lower by downgrades.

Schulman was cut to hold from buy at KeyBanc after lowering its guidance after the close Tuesday, pulling shares down 11.2% to $21.27. Epiq lost 7.3% after A.G. Edwards lowered its rating to hold from buy, citing valuation, and UBS similarly downgraded Option Care to neutral from buy. Its shares shed 1.5% to $15.62.

Elsewhere, semiconductor firm MathStar ( MATH) offered 21.9 million of its shares at $1.60 apiece -- a 13.5% discount to the Oregon company's latest close. Underwriters have a 30-day option for up to another 3.1 million shares to cover any overallotments. Shares were off 8.1%, or 15 cents, to $1.70.

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