Updated from 2:32 p.m. EST with new stock prices

Small-cap stocks started Thursday with a loss, but recently bounced back into positive territory, mirroring action by the broader market.

Houston's ExpressJet ( XJT) joined other airlines in soaring 9.6% to $2.29 on news that October airline traffic rose 4% to 64.1 million domestic and international passengers over the same month in 2006. The increase keeps the industry on pace to reach record passenger levels for 2007.

Meanwhile, shares of BankAtlantic ( BBX) leapt up 14.2% to $3.85 after Fox Pitt upgraded the Fort Lauderdale, Fla.-based bank holding company to outperform from in line.

Eddie Bauer ( EBHI) shares ventured up 35.5% to $6.19 on news of improved fourth-quarter sales. The Redmond, Wash.-based clothing retailer posted a 4.8% increase in total year-over-year same-store sales, or sales from stores open at least a year. Eddie Bauer also announced total preliminary net merchandise sales of $378 million, up from $365 million in 2006.

On the losing side, Electronics for Imaging ( EFII), a Foster City, Calif.-based provider of printer-related products and services, plummeted 31% to $13.22. BMO Capital Markets and Collins Stewart piled on to last night's earnings forecast-related losses by downgrading the company to outperform from market perform and to sell from market perform, respectively.

Synaptics ( SYNA) also tumbled on a downgrade. AmTech Research cut the Santa Clara, Calif.-based maker of user interfaces for digital lifestyle products to neutral from buy. Shares dropped 14.9% to $32.71.

At $6.21, shares of restaurant franchiser Ruby Tuesday ( RT) said good-bye to 14.2% of their value. The Maryville, Tenn., company reported last night that it swung to a fiscal second-quarter loss of $10.4 million, or 20 cents a share, vs. earnings of $16.7 million, or 28 cents a share, a year ago. The loss was in line with analyst expectations, per Thomson Financial, but Ruby Tuesday also cut guidance for 2008. It now predicts EPS of 40 cents to 60 cents, while Street expects 47 cents.

Finally, shares of spray lubricant maker WD-40 ( WDFC) slipped 12.9% to $31.66 on first-quarter earnings. The San Diego company reported income of $6.2 million, or 36 cents a share, compared with $5.7 million, or 33 cents a share, in the year-ago quarter. Analysts were expecting 41 cents a share.

More broadly, the Russell 2000 was up 1.1% to 720.21, and the S&P SmallCap 600 gained 0.8% to 372.11.