Small-cap stocks traded beneath most of the market for the third straight session, and UTStarcom ( UTSI) was among the most prominent losers. Shares of the Alameda, Calif., telecom firm slid 17.6% to $3.90 after announcing an independent review of sales contracts with China-based customers, which "could impact" past relevant revenue and possibly further delay the filing of its delinquent and upcoming regulatory reports. The company also said its prior stock-option-grant review will result in about a $28 million noncash restatement from 2000 through 2006. Moissanite-jewels distributor Charles & Colvard ( CTHR), based in Morrisville, N.C., sliced its second-quarter income in half from last year to 3 cents a share, or $529,000. Analysts polled by Thomson Financial were looking for the company to flat-line. Shares tumbled 18.7% to $4.23. Also turning in disappointing financials was Marten Transport ( MRTN). The Wisconsin-based trucking company posted a shrinking second-quarter profit of 20 cents a share that widely missed the 29-cent analyst consensus. Revenue, at $138.8 million, was also lower than expected. Shares surrendered 15% to $15.06. Volterra Semiconductor ( VLTR), of Fremont, Calif., shed 11.6% after swinging to a wider loss than what the Street had forecast. That pressured the Russell 2000 Index, which plummeted 3% to 810.64. The S&P SmallCap 600 slumped 11.39 points, or 2.6%, to 426.35. On the other hand, Virginian real estate investment trust Republic Property Trust ( RPB) soared 23% after agreeing to sell itself to Liberty Property Trust ( LRY) for $14.70 a share in cash -- a 28% premium to its latest closing price. The $850 million deal should close in the fourth quarter. Republic shares were trading at $14.12 as Liberty Property lost 6.4% to $40.17.