Small-cap stocks gave back the previous day's gains and more Tuesday, falling sharply along with the major indices. The Russell 2000 recently dropped 2% to 698.87, and the S&P SmallCap 600 lost 1.7% to 362.22.

Shares of Minneapolis-based money-transfer and payment-processing servicer MoneyGram International ( MGI) were cut in half, down 50.7% at $6. The company announced late Monday that, from Sept. 30 to Nov. 30, its investment portfolio lost an unrealized $571 million, bringing total losses to $860 million. MoneyGram is negotiating with Thomas H. Lee Partners for a cash injection of about $800 million. Under the proposed deal, Thomas H. Lee Partners would control between 60% and 65% of MoneyGram.

Meanwhile, Coldwater Creek ( CWTR), a Sandpoint, Idaho-based women's retailer was downgraded by Oppenheimer to perform from outperform. Stanford Research also took Coldwater down a peg, to sell from hold. Shares plummeted 24% to $3.91.

Another retailer to suffer a downgrade, Birmingham, Ala.'s Hibbett Sports ( HIBB) fell 18% to $13.07 on a Friedman Billings downgrade to market perform from outperform.

Also losing ground was Memsic ( MEMS), shares of which ceded 19.4% to $6.78. The Andover, Mass., provider of semiconductor and systems solutions exercised its overallotment option to buy 823,000 shares of its stock at $10 a share, the price at the company's IPO, less underwriting discounts and commissions.

Despite the fierce environment, the day produced some winners. Among them was Vignette ( VIGN), which added 27.5% to $14.55 after forecasting last night that revenue for the fourth quarter would be between $52 million and $54 million. Analysts polled by Thomson Financial on average expect revenue of $47.4 million.

SumTotal Systems ( SUMT) also raised its fourth-quarter forecast, predicting non-GAAP income of $1.5 million to $1.8 million, or 5 cents to 6 cents a share. This compares with previous guidance for income between $500,000 and $1.5 million, or between 2 cents and 5 cents a share. The Street anticipates earnings per share of 3 cents. Shares jumped 13% to $4.50.

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