Tarragon ( TARR), a New York-based homebuilder, dove nearly 70% after announcing that liquidity issues have hindered the company from completing about $50 million in financing transactions that were previously expected to close this month. The firm said that this and other issues "raise doubt about Tarragon's ability to continue as a going concern." Shares were down $1.95 to 87 cents.

Shares of Home Diagnostics ( HDIX) were losing a third of their value at $7.48 after the Florida-based firm reported that second-quarter income sank by 2 cents to 9 cents a share on slipping revenue of $28.1 million. The company, which makes blood-glucose-monitoring systems, also trimmed its 2007 profit guidance to between 60 cents and 64 cents a share, which compares with the prior range of 62 cents to 67 cents a share.

Apparel retailer Citi Trends ( CTRN) also plunged on a soft earnings outlook. The Savannah, Ga., company pegged second-quarter income between 2 cents and 5 cents a share, primarily citing a negative same-store sales trend that began last month. Analysts polled by Thomson Financial are looking for 15 cents a share. Citi Trends shares slid 28.6% to $27.21.

H&E Equipment Services ( HEES), a purveyor of heavy-construction and industrial equipment, posted a 23.1% drop in per-share income to 40 cents. That missed Wall Street estimates by a dime, according to Thomson Financial. Full-year guidance, at $1.59 to $1.67 a share, should fall short by at least 17 cents. Shares of the Baton Rouge, La., company were plunging 22.1% to $21.55.

The Russell 2000, dragged down by most of the above stocks, tumbled 1% to 787.8 to chase the S&P SmallCap 600, which lost 1.2% at 410.1.

Hoku Scientific ( HOKU) ranked among the few winners, however, leaping 11% after the Hawaii-based clean-energy company inked deals for the construction of a new polysilicon production plant capable of churning out 2,000 metric tons of polysilicon a year. Contracts were awarded to JH Kelly and to a Shaw Group ( SGR) subsidiary. The project's total installed cost target is $260 million, and it's slated for mid-2009 completion. Shares were up $1.04 to $10.50.

The Knot ( KNOT), a wedding-planning Web site, posted flat second-quarter income vs. last year -- 15 cents a share -- but that squashed analysts' dime-a-share targets. Revenue soared 60.7% to $28.5 million, which likewise topped the consensus. Shares of the New York-based company bounced $3.07, or 16.4%, to $21.75.

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