Updated from 2:37 p.m. EST with new stock prices

Small-cap stocks spent most of Wednesday underwater, briefly surfacing at the baseline only to dive well below the struggling broader market. The Russell 2000 lost 1.4% at 695.49, and the S&P SmallCap 600 sunk 1.1% at 365.68.

Shares of Minnesota-based Hutchinson Technology ( HTCH) dropped 33.2% to $16.18. After posting weak first-quarter earnings last night, the designer of suspension assemblies for disk drives suffered a double downgrade, to hold from sell by Brean Murray and to average from above average by Caris & Co.

Also anchoring the fun ship was ShoreTel ( SHOR), which sunk 16.8% to $5.04 after the opening bell. The provider of switch-based Internet protocol telecom systems reported fiscal second-quarter earnings after Tuesday's closing bell that were in line with the lowered guidance it gave on Jan. 7. However, at least two law firms have announced shareholder class-action lawsuits against the Sunnyvale, Calif., company. The firms allege inadequate disclosure, misrepresentation by management of the strength of the company and inadequate due diligence before ShoreTel's July 2007 initial public offering, among other things.

Lumera meanwhile, hit the doldrums as the Bothell, Wash., company announced that its subsidiary, Plexera Bioscience, acquired rights to Auguron Bioscience's Nucleic Acid Programmable Protein Array technology, which helps generate proteins from surface printed DNA. Terms of the licensing agreement were not disclosed, and shareholders abandoned ship, dropping Lumera's stock 8.5% to $2.90.

Among the small-caps to weather the storm was CyberSource , which gained 22.5% to $16.01. Yesterday after the close, the Mountain View, Calif.-based provider of electronic payment and risk management solutions for Internet orders announced non-GAAP fourth-quarter earnings of $9.2 million, or 15 cents a share, vs. $3.3 million, or 9 cents a share, in the year-ago quarter. The results beat the average analyst expectation by a penny, according to Thomson Financial. Wedbush Morgan launched the company further with an upgrade to strong buy from buy.

Finally, Bermuda-based dry-bulk shipper TBS International also stayed afloat after announcing yesterday post-close that it had received a new ship it had chartered for $26 million in October 2007. The company also expects to add five more ships to its fleet by the end of the first quarter. Shares surged 19.8% to $30.91.