Small-cap stocks took a pounding along with the major indices Friday. The Russell 2000 fell 2.5% to 726.56, and the S&P SmallCap 600 lost 2.6% to 376.29.

Leading off the losers, Thief River Falls, Minn.-based Arctic Cat ( ACAT) fell through the ice after the snowmobile and all-terrain vehicle maker forecast lowered third-quarter 2008 earnings. Citing lower-than-expected ATV sales, Arctic Cat now expects a loss of 55 cents to 60 cents a share, wider that previous guidance of a loss of 30 cents to 37 cents a share. Analysts polled by Thomson Financial expect an EPS loss of 32 cents. Shares slipped 23% to $9.35.

Also falling on lowered outlook was Micrel ( MCRL), which dropped 19% to $6.36 as the San Jose, Calif.-based provider of communications solutions announced that EPS for the fourth quarter of 2007 would be between 10 cents and 11 cents, down from previous guidance -- and The Street's expectation -- of 13 cents a share.

Talbots ( TLB) also slumped, 13% to $9.32, after the Hingham, Mass.-based apparel retailer announced it would close 78 of its stores.

Meanwhile, payment processor Global Payments ( GPN - Get Report) took a 14% tumble to $38.69 after Credit Suisse downgraded the stock to underperform from neutral.

The down day nevertheless permitted several big winners. Shares of North Pointe Holding ( NPTE), a Southfield, Mich.-based provider of commercial and personal insurance, vaulted 46% to $15.44 on news that Australian firm QBE Holdings would buy the company for $146 million, or $16 a share, in a cash deal expected to close during the first half of 2008.

Also popping was Azz ( AZZ - Get Report), which last night reported third-quarter results for fiscal 2008. Income rose year over year to $8.1 million, or 66 cents a share, from $5.2 million, or 44 cents a share. One analyst surveyed by Thomson Financial was expecting 53 cents a share. CEO David Dingus also raised 2008 EPS guidance to between $2.12 and $2.22. Wall Street predicts EPS of $2.12. Shares of the Fort Worth, Texas, maker of power generators got goosed 11% to $31.99.

Meanwhile, Vancouver gold miner NovaGold ( NG) saw shares jump 12% to $11.72 after the company announced that the U.S.'s Ninth Circuit Court of Appeals ruled in its favor. The Bering Straits Citizens for Responsible Resource Development had challenged a previous ruling in NovaGold's favor regarding a Clean Water Act permit for its Rock Creek mine near Nome, Alaska.