The small-cap sector spent much of Tuesday in negative territory before finishing to the upside thanks to the climbing broad market and rising stocks from a variety of sectors. Among the biggest gainers was marketing-services firm Valassis Communications ( VCI, which surged 22.2% after third-quarter earnings more than doubled from last year to $16.4 million, or 34 cents a share. Analysts were looking for just 22 cents a share, according to Thomson Financial. Revenue soared to $607.2 million from last year's $248.9 million, easily beating the $582 million consensus. Shares of the Livonia, Mich., company were up $2.36 to $13. Chesapeake ( CSK, a Virginia-based maker of paperboard packaging products, throttled past estimates with continuing-operations earnings of $6.6 million, or 34 cents a share (excluding special items). Analysts were looking for a loss of 3 cents a share; last year the company made 13 cents a share. Chesapeake stock leapt $1.55, or 27.1%, to $7.26. That helped prop up the Russell 2000, which also tracks Valassis, and the S&P SmallCap 600. The sector trackers were tacking on about 0.9% apiece. In more positive earnings, construction-materials maker Headwaters ( HW and business-software developer Pegasystems ( PEGA - Get Report) each swung to a profit in the most recent quarter, with Headwaters also topping estimates by a nickel a share. Its stock climbed 6.5% to $14. Pegasystems vaulted $2.12, or 19.7%, to $12.89.
Meanwhile, Progressive Gaming International ( PGIC flew 15.9% higher after the Las Vegas gambling-equipment maker settled outstanding antitrust litigation for $20 million. The lawsuit in question, which was brought against Progressive for alleged attempted monopolization in 1998 and 1999, had been won by plaintiffs Derek Webb and Prime Table Games earlier this year. The award had been $13 million, to be tripled in accordance with applicable law. Last week, Progressive took a slide after saying a U.S. District Court in Mississippi had denied its post-trial motions for judicial relief, and that it would begin an appeals process. Today, after a few days of mixed trading, shares were up 65 cents to $4.75 in almost full recovery. On the flip side, Emageon ( EMAG stock lost one-third of its value after the Birmingham, Ala., company broadened its third-quarter loss to $4.3 million, or 20 cents a share, from a penny a share a year ago. That's 15 cents wider than what Wall Street was expecting. Revenue sank 31.2% to a lower-than-expected $22.7 million. Shares of the company, which develops software for clinical analysis and management of digital medical images, were sinking $2.50 to $5. Fellow tech stock Lionbridge Technologies ( LIOX gave up 21.2% to $3.54 after posting a third-quarter loss of $666,000, or a penny a share, on $111.5 million in sales. That's an improvement from last year, but analysts were looking for the Waltham, Mass., company to earn 4 cents a share on revenue of $115.3 million. Elsewhere, paid Internet-search operator Local.com ( LOCM more than doubled its third-quarter loss from last year to 71 cents a share, lately pressuring shares down 18.3%, and Radio One ( ROIAK reported shrinking top and bottom lines in that quarter. Shares of the Maryland radio broadcaster were off 4.1% to $3.27.