NEW YORK ( TheStreet) -- Mortgage insurance companies Radian ( RDN) and MGIC Investment ( MTG) were the biggest gainers in the small-cap space Friday as the U.S. Treasury Department looks to scale down the role of mortgage giants Fannie Mae ( FNMA.OB) and Freddie Mac ( FMCC.OB) in the housing market.

The report proposed that the Federal Housing Administration, which competes with private firms selling mortgage insurance, should cover fewer loans and raise prices. That would give private insurers such as Radian and MGIC a chance to compete more effectively in the market.

Shares of Radian were soaring 13% to $7.99 with nearly 14 million shares changing hands in afternoon trading. MGIC Investment saw its stock jump 10%. The stock of another mortgage insurer, PMI ( PMI), also saw heightened volume activity at nearly 12 million shares, but rose by a more modest 2.5% to $3.33.

Biotech company Neurocrine Biosciences ( NBIX) was surging 9% to $8 after it swung to a profit in the fourth quarter on higher research and development and licensing payments and issued a higher-than-expected forecast for 2011 .

The company earned $2.5 million, or 4 cents a share, on revenue of $13.7 million, meeting expectations on profit but outpacing top line estimates. The company expects profit in 2011 between 62 cents and 71 cents per share on revenue between $75 million and $80 million. Analysts expect 41 cents in profit on $69.4 million in revenue, on average.

Shares of independent oil and gas company Hyperdynamics ( HDY) climbed 8% to $7.91 after brokerage firm Rodman & Renshaw initiated coverage on the stock with an outperform rating.

Apparel maker Jones ( JNY) saw its shares jump 5% to $13.99. The company reported better-than-expected results earlier this week. . In the fourth quarter, the company who owns Nine West, Jones New York and Anne Klein, reported a loss of $40 million, or 47 cents a share, compared with a loss of $130.3 million, or $1.53, in the year-ago period. On an adjusted basis, Jones earned 4 cents, a penny higher than estimates.

Major solar stocks including JA Solar ( JASO), Yingli Energy ( YGE) and GT Solar ( SOLR) were gaining 4.3%, 3.7% and 3.4% respectively in Friday trading. A UBS note on Friday morning speculated that new California Gov. Jerry Brown would sign into law an increase in the state's renewable energy standard to 33%. The California Air Resources Board had recommended in late 2010 a new 33% renewable energy mandate.

--Written by Shanthi Bharatwaj in New York

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Disclosure: TheStreet's editorial policy prohibits staff editors and reporters from holding positions in any individual stocks.

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