Updated from 1:12 p.m. EST with new stock prices

Small-cap stocks took a tumble in early trading Friday, only to recover back toward the baseline and make up most of the ground they lost to the major indices. The S&P SmallCap 600 showed almost no net change, down a fraction at 407.79, and the Russell 2000 Index fared similarly at 785.52.

Shares of Imax ( IMAX - Get Report) rocketed 57.8% higher to $7.32 after the Canada-based motion picture technologies provider announced it had signed a 100-theater deal with cinema chain AMC Entertainment to install its digital projection systems in 33 U.S. markets beginning in July 2008.

Meanwhile, Liquidity Services ( LQDT - Get Report) shares took off 21.4% to $13.32 on fourth-quarter earnings. The online auctioneer of wholesale, surplus and salvage assets reported revenue of $51.7 million, up 30% from last year. Liquidity also posted earnings of $3.2 million, or 11 cents a share, vs. $2.2 million, or 8 cents a share, in the year-ago period. Analysts surveyed by Thomson Financial were expecting 8 cents a share.

Also gaining ground on earnings was Sirona Dental Systems ( SIRO). The Long Island City, N.Y., maker of tooth restoration products swung to a fourth-quarter profit and guided higher for 2008. Income rose to $52 million, or 93 cents a share, vs. a loss of $1.5 million, or 3 cents a share, in the year-ago quarter, beating analyst EPS expectations of 29 cents. Sirona now expects 2008 operating income, excluding amortization, to be in the range of $145 million to $155 million, compared with $133 million in 2007. Shares were gaining 12.6% to $30.51.

On the other side, Smith & Wesson ( SWHC) was dealt a losing hand, plummeting 28.6% to $7.08 after a triple analyst downgrade Thursday evening. Rodman & Renshaw took the Springfield, Mass., gun and handcuff maker down to market underperform from market perform. Cowen & Co took it down to neutral from outperform, and DA Davidson dropped the company from buy to neutral. Smith & Wesson had posted rising second-quarter profits but offered lower guidance for 2008.

Also in a slump was Cascade ( CAE - Get Report), a Fairview, Ore., maker of forklift parts lost 16.9% to $53.43 after announcing a small third-quarter profit improvement to $12.4 million, or a dollar a share, from $12.3 million, or 94 cents a share, in the year-ago quarter. This missed the mark set by analysts, who had forecast EPS of $1.08.