Another big day in the market meant huge gains for a number of small-cap stocks. Here are the five small caps that made the biggest moves.

Kevin is well-versed on all things commodities and he recently hunted down a few small cap companies I think you will find very compelling.

Selecting good stocks isn't easy. Whether you're focused on small cap growth or large cap value and everything in between, there are so many stocks to choose from.

With roughly 15000 publicly traded companies listed on major U.S. exchanges and in various over-the-counter markets, the task of separating the outstanding companies from the rest can be a very daunting task. But with the assistance of some free stock screening tools, this part of the research process can easily be simplified.

You have to sell something in order to grow.

It may sound ridiculous, but one of the most important factors for a small cap growth stock is that it is actually growing sales. Simple, but true. After some of the accounting and earnings management scandals over the past decade the comment becomes less absurd.

***With the Russell 2000 trading near it's all time high, now isn't the time to buy a small-cap index fund such as the iShares Russell 2000 (NYSE: IWM). Rather, now is the time to perform thorough and extensive research to find stocks that offer attractive growth and trade at decent valuations and have been overlooked by other investors and analysts.

I have several on my watch list that I will be sharing with you over the next few weeks. Last week, I brought you DUSA pharmaceuticals. Since writing the report the stock has jumped 11.4%. Today I'll tell you about another undervalued small-cap gem that could reward investors in the years to come.

Lawmakers in New Hampshire, South Carolina, Tennessee and Virginia have introduced bills that would allow them to mint their own currencies, or otherwise allow for alternative currencies to settle debts both public and private.

Utah recently passed a bill recognizing gold and silver as legal tender.

Texas Congressman Ron Paul recently introduced a bill which would allow gold and silver (among other precious metals) to compete with Federal Reserve notes.

I ran a quick screen on the 5 best performing small cap BRIC stocks YTD. It is no surprise to find that tech stocks dominate the list. I think you will find a few gems that have the potential to be quite prosperous. I will actually delve further into a couple of these stocks next week. Check it out!

The following is a list of today’s winners and losers within the Russell Microcap Index.

I’m going to take a stab at doing something I truly detest – I’ll ponder, however briefly – some of the elements that are coming into play that suggest we are rapidly approaching an area where downside risk is outweighed by upside potential.

Loyal readers of this column will remember back in March I wrote a piece that examined stock market declines in recessionary frames dating back more than 30 years. The basic equity collapse during recessions tends to wind up in the 50% zone (for reference, small-caps tumbled 47% in the 2000-2001 bear market recession). At Friday’s low, the Russell 2000 (NYSE:IWM) was down 46% and a rounded off 50% recession target is at 430, or about 8.5% below current values. I realize 430 seems cruel after what we’ve already endured, but as you’ll see below there are legitimate chart formations in play that also carry a target down to 415. But if this recession collapse starts to peter out in the 50% zone, then at 450 or so the temptation to consider low-risk buy-side market approaches makes some sense – at least mathematically.

OK, so we’re fast approaching historical recession bear market norms and the market is dramatically oversold, but another tantalizing detail comes from a seasonal standpoint. Simply put, October is a great month for the market to stage major bottoms. We have seen key small-cap lows forged in the month of October in 2005, in 2002, in 1999, in 1998, in 1992 and in 1990. And in 2001, the low was set in late September. So there you have it: the seasonal is favorable, the market is ripe for a bounce given overdone momentum readings and the declines are approaching our recession targets.

The Russell 2000 (NYSE:IWM) is expected to open lower, pulled down by disappointing same-store sales from Wal-Mart Stores Inc. (NYSE:WMT), huge quarterly losses by insurance giant American Insurance Group (NYSE:AIG), troubling weekly unemployment claims and a jump in crude oil prices overnight. The Russell 2000 was down about 0.5% in after-hours trading, suggesting an open today near 721.50.

The weekly claims report came in at 455,000, which was well above the forecast for a decline to 420,000. The 4-week moving average for claims shot to 419,500 and continued claims are at 3.311 million. The recent surge in claims provides a troubling picture of the labor market, and undercuts hopes for economic recovery.

There was an expectation ahead of the July same-store sales reports that discounters like Wal-Mart and Costco (Nasdaq:COST) would outperform more expensive fare from the big department stores as we approach the “back-to-school” sales push. However, if WMT struggles, it sets a nervous tone for the entire group. It should be noted that COST did beat the forecast for sales, which takes a little of the edge off WMT’s disappointment...

Small-cap stocks edged higher Tuesday, supported by a pullback in crude oil prices, a firm tone in the U.S. dollar, a jump in tech stocks and modest buying from those who saw last week’s damage as overdone. Energy-inspired trades, both on the buy side and sell side, were also a prominent feature in stocks. The Russell 2000 (NYSE:IWM) closed up 10.28, or 1.42% at 734.38.

Despite an extended holiday weekend, trading decisions in equities continued to be directed by the same dominant element that was the focal point last week – gyrations in crude oil prices. When crude oil was higher before this morning’s opening, stocks were lower in pre-market trading, and when the energy market tumbled right before the opening, stocks started higher and held onto those gains throughout the session.

With crude oil taking a breather today, energy stocks became a profit-taking target, and one of the major drags on large-cap index products came from the energy sector. Exxon Mobil Corp. (NYSE:XOM) was off 0.8% and Chevron Corp. (NYSE:CVX) was down 1.2%. Another play on the crude oil decline came from airline stocks—a group that could use a break on the energy front after being hammered for months on end. The AMEX Airline Index was up 3.8% Tuesday, and small cap US Airways Group Inc. (NYSE:LCC) gained 4.5%, small comfort after collapsing 46% last week...

Watch this section for a periodic look at topics of interest from the staff of SmallCapInvestor.com.

It’s been a rough ride for technology this year. However, the small-cap tech space looks to be bottoming out, which means opportunities are emerging for investors.

The tech-heavy Nasdaq index is down roughly 5% year-to-date, though narrowing from a wider negative margin of as much as almost 17% in March.

“[Small-cap tech] has been an area that has been very much a stock picker's market rather than a broad coverage,” said Joe McNay, chief investment officer and managing principal of Essex Investment Management Company, in an interview last week.  “Overall, I think it's been an improving area that many stocks are making bottoms in — as a whole it continuously looks a little better. We’re at a point where there are lots of opportunities.”

Much like the economy, technology stocks exhibit a degree of cyclicality. The first expenditures that businesses typically cut back on are technology purchases. On the consumer side, disposable income is funneled into necessities first and discretionary items second.

The consumer could remain under pressure, as rocketing food and oil prices coupled with credit that is hard to come by and rising unemployment levels have crimped purse strings this year. However, as the Federal Reserve’s rate cuts begin to kick in and create greater liquidity, corporations should get back on their feet as they . . .

BankUnited Financial Corp. (Nasdaq:BKUNA), Green Plains Renewable Energy Inc. (Nasdaq:GPRE) and WP Stewart & Co. Ltd. (NYSE:WPL)were among the new 52-week lows established Monday among companies with market capitalizations or values under $750 million.

Here are today's 52-week small-cap lows:

Sequenom Inc. (Nasdaq:SQNM), NetScout Systems Inc. (Nasdaq:NTCT) and Ultralife Batteries Inc. (Nasdaq:ULBI) were among the new 52-week highs established Monday among companies with market capitalizations or values under $750 million.

Here are today's 52-week small-cap highs:

The Russell 2000 (NYSE: IWM) futures are up and the small-cap index will likely rise as global equities rally following the Fed interest rate cut.

The U.S. Federal Reserve decided on Tuesday to lower the federal funds rate to 4.75% from 5.25%, a move that sent U.S. equities flying. Today the rally spread overseas, as the major Asian and European markets posted solid gains.

In economic news, consumer prices in the United States surprisingly fell 0.1% in August, the U.S. Labor Department announced. Economists were expecting prices to stay put following a 0.1% rise in July.

Core prices, which exclude the volatile costs food and energy, added 0.2%, as projected.

The numbers suggest that inflation remains in check.

Meanwhile, U.S. housing starts for August fell a more-than-expected 2.6% to a level of 1.33 million. That’s below the expected level of 1.36 million and the latest sign that the slump in the U.S. housing sector is far from over. Housing starts in July were a downwardly revised 1.37 million.

Michael Baker Corp. (AMEX: BKR), Calavo Growers, Inc. (Nasdaq: CVGW) and Atrion Corp. (Nasdaq: ATRI) are among the biggest percentage gainers in Wednesday's trading among companies with market capitalizations under $500 million.

Here are today's biggest percentage gainers:

The Topps Company, Inc. (Nasdaq: TOPP), a sports card and bubble gum maker, announced it delayed a shareholder vote on a proposed buyout by Michael Eisner’s Tornante Co. LLC and Madison Dearborn Partners LLC, both private equity firms, until September 30.

Shareholders were previously scheduled to vote on the $9.75-per-share, or $385 million, deal this week on Thursday, August 30.

Topps previously agreed to Tornante’s offer in March, but received an unsolicited offer for $10.75 per share from rival The Upper Deck Co. LLC in May, which sparked a bidding war. Upper Deck dropped its offer on August 21, saying the negotiation process was “flawed.”

Topps said the delay allows shareholders to evaluate recent developments in deciding how to vote their shares. The sports card maker said that the postponement will give investors the opportunity to consider the recent developments involving Upper Deck. Shareholders should also consider that no other bidder has emerged to acquire Topps, the company noted in a release.
 
Last week, The Committee to Enhance Topps, a stockholder group, sent a letter to investors urging them to reject the offer, demanding most board members resign and provided suggestions for new members. Arnaud Ajdler, a Topps board member and co-managing partner of investment company Crescendo Advisors LLC, leads the group.

In a letter to shareholders released on Friday, Topps called Upper Deck’s offer a "sham" and Ajdler’s plan "risky."

American Biltrite Inc. (AMEX: ABL), Oplink Communications Inc. (Nasdaq: OPLK) and Birks & Mayors Inc. (AMEX: BMJ) were among the new 52-week lows established Tuesday among companies with market capitalizations or values under $500 million.

Here are today's 52-week small-cap lows: 

Qiao Xing Universal Telephone Inc. (Nasdaq: XING), Provident Financial Holdings Inc. (Nasdaq: PROV) and Colonial Bankshares Inc. (Nasdaq: COBK) are among the biggest percentage gainers in Tuesday's trading among companies with market capitalizations under $500 million.

Here are today's biggest percentage gainers:

Retalix Ltd. (Nasdaq: RTLX), Oplink Communications Inc. (Nasdaq: OPLK) and Protherics plc (Nasdaq: PTIL) are among the biggest percentage losers in Tuesday's trading among companies with market capitalizations under $500 million. 

Here are today's biggest percentage losers:

The Russell 2000 (NYSE: IWM) and the Dow Jones Industrial Average (INDU) are lower on news of more credit concerns, despite generally positive earnings.

At 10:15 a.m. ET the Russell 2000 was down 1.92 points, or 0.24%, to 785.53. The Dow was down 45.36 points, or 0.35%, to 13,075.99.

Minneapolis-based retailer Target Corp. (NYSE: TGT) reported that second-quarter profit rose 13% to $686 million, or $0.80 per share, compared with $609 million, or $0.70 per share, in line with analysts’ expectations.

Similarly, office products retailer Staples Inc. (Nasdaq: SPLS) said that its second-quarter profit rose 11%, also inline with Wall Street’s forecast.

Worries of tightening credit have resurfaced, following news that Capital One Financial Corp. (NYSE: COF) will close its wholesale mortgage business due to the lower profitability of repackaging home loans and selling them in secondary markets.

Banc of America Securities contributed to the credit worries when it announced that it has cut the rating of a number of U.S. home builders negatively affected by the slump in the housing sector.

The Russell 2000 (NYSE: IWM) and the Dow Jones Industrial Average (INDU) are little changed this morning following last week’s discount rate cut.

At 10:03 a.m. ET the Russell 2000 was up 1.66 points, or 0.21%, to 787.69. The Dow was up 0.89 points, or 0.01%, to 13,079.97.

On Friday, the U.S. Federal Reserve lowered the discount rate, the rate it charges commercial banks on loans they receive, to 5.75% from 6.25% in a move to limit the negative effects of the subprime meltdown.

Stocks jumped and ended the day with large gains. Today the major European and Asian stock markets reacted by closing in positive territory.

In the U.S., stocks began the day higher but the positive momentum ran out of steam shortly thereafter.

For the past ten years the stocks picked by BusinessWeek’s Gene G. Marcial have outperformed the S&P 500, the Dow Jones Industrial Average and the Russell 2000 after one day and after one, three and six months. Between 1997 through the end of last year, the stocks featured in Marcial’s “Inside Wall Street” column returned, on average, 7.1% in the immediate six-month time span, two percentage points better than the Russell 2000.

Small-cap stocks have been a big reason for Marcial’s success over the years. Among the companies Marcial has recommended this year are Pipex Pharmaceuticals, Inc. (AMEX: PP), Ultralife Batteries, Inc. (Nasdaq: ULBI), Exponent, Inc. (Nasdaq: EXPO), Cardiac Science Corp. (Nasdaq: CSCX), and USA Technologies, Inc. (Nasdaq: USAT).

In the following interview with SmallCapInvestor.com Marcial talks about his approach to stock picking and his outlook for small-cap stocks.

Explain your investment process and criteria for finding great stocks.

Since I am a financial journalist, the first question I ask about any investment idea is, "What is the story, and will it be of great interest to my readers?" I am not surprised that this approach results in me getting good stocks to write about, and often they are undiscovered and below the radar screen of the institutions. I believe that a good company with a great story -- about a product, technology, earnings growth, possibly a takeover play, or a restructuring, including spin-offs or asset sales -- could well be a great stock to buy.

After the closing bell, The Boston Beer Company, Inc. (NYSE: SAM) executives raised their top end full-year earnings guidance during a conference call. The beer maker now expects earnings in the range of $1.42 to $1.70 per share for the year ended Dec. 31, compared with previous guidance of $1.42 to $1.55., CFO Bill Ulrich said during the call. CEO Martin Roper said the wide range of guidance is because “there are so many moving pieces right now.”

“There are a number of unknowns and we felt that it was prudent to widen the range if everything goes – so to speak – our way,” Ulrich said. “It may be one way, and if things are more conservative it may be the other way.”

The company, which makes beer under the Samuel Adams and Twisted Tea brands, does not want to project growth further into the future.

“We do feel good about where we are right now, but none of us really knows what the future holds,” Roper said. “We would not want that to lead anyone astray by predicting future years.”

During afternoon trading, Boston Beer reported second-quarter revenue of $92.9 million, compared with $79.3 million in the same period of 2006. For the three months ended June 30, the beer maker recorded a profit of $6.8 million, or $0.48 per share, down from $8 million, or $0.57 a share, during the equivalent months of 2006.

Boston Beer’s earnings were below expectations of $0.58 per share because its results took into account a $3.4 million, or $0.14 per share, write-off for a new brewery project in Freetown, Mass.

The company increased its net revenue per barrel 2% through pricing initiatives, Roper said. Also, the company’s effective tax rate during the second quarter increased to 42.4% from 39.4%, he said.

The company’s profits were harmed by higher barley, hops, packaging, glass, freight and utilities costs, Urich said in a statement. Still, Roper said in a release, “We currently expect that, if our volume gains continue for the rest of the year, we will be able to meet or even exceed our previously communicated earnings goals even after including the asset write-off of brewery costs we took in the second quarter.”

At the half-way point of 2007, Canada’s small-cap fund managers have extended their winning streak.

For the third consecutive quarter, the country's small-cap managers outperformed their counterpart large-cap managers, according to Russell Investment Canada's report for the second quarter ended June 30. (Based in Tacoma, Russell Investment Group says it advises institutional clients with total assets of over C$2.0 trillion. Russell follows 31 small-cap Canadian funds and 75 large-cap ones.)
              
Kathleen Wylie, Russell's senior research analyst, said in her review that the median small-cap manager returned 7.1% during the most recent three-month period, compared with the median large-cap manager return of 6.4%.
              
That is largely because Canadian small-cap managers won out by having a smaller weight in the broadly underperforming Canadian financial services sector. Small caps had an average of 14% in that sector, compared with 30% for large cap.
               
As well, small-cap managers on average had roughly 12% of their portfolios in the positive consumer discretionary sector, compared with only a 5% weight by large-cap managers.
              
Wylie noted that despite the rally in resource prices such as oil and base metals in 2005 and most of 2006, small-cap managers still lagged their large-cap counterparts.
               
"However, we're half-way through the year and I'm still more encouraged by the active management environment (among small-cap managers) now than I have been in the last couple of years when the market was dominated by resource stocks," she said. 

Last week, I began a column on small-cap funds, noting that while they are not immune to a market decline, they do offer the added safety of diversification and professional management.

This week we continue our look with a trio funds that add another element of “value” during a volatile market period. All three – from the WisdomTree family of exchange-traded funds – focus on dividend-paying stocks.

Jim Lowell looks abroad and rates WisdomTree International SmallCap Dividend Fund (NYSE: DLS) a “buy.”

The editor of Forbes ETF Advisor says, “Show me the money; or better yet, show me the jobs! Where jobs are being created, consumers are being minted. Where consumers are being minted, money is being spent. Where money is being spent revenue is being generated. Where revenue is being generated earnings can arise.”

This fund, notes Lowell, focuses on the “least well followed and most inefficiently traded” capitalization range in the established foreign markets of Europe and Japan –   small caps.

He explains, “And just as U.S. small cap stocks have been the best long-term investment over the past 30 years here, born on the burgeoning middle/consumer class that holds our economy’s fate in its spending hands, the re-emerging middle class in Europe, and the emerging middle class in Asia are doing likewise.”

Executives of COMFORCE Corp. (Amex: CFS), a provider of outsourced staffing management services, said the company’s Human Capital Management Services segment, which consists of the company’s staffing solutions Pro Unlimited subsidiary, propelled quarterly growth. During the quarter, Fanning said the company also added three accounts that will contribute more than a $1 million each in gross profit.

“Pro Unlimited continues to lead our sales growth by posting a 10.1% increase in revenues for the quarter” ended July 1, CEO John Fanning said during the call. “We remain optimistic concerning our company’s prospects for the balance of 2007.”

The company’s Human Capital Management Services segment recorded a gross profit during the second quarter of $12.3 million, compared with $10.7 million in the year-ago period, Bob Ende, senior vice president of finance, said during the call.

Before the opening bell, COMFORCE reported second-quarter revenue of $149.7 million, compared with $143.6 million in the year-ago period. For the three months, the company recorded a gross profit of $23.3 million, compared with $22.2 million during the same period of 2006. The company announced a net income of $1.1 million, or $0.03 per share, compared with $1 million, or $0.03 per share, a year earlier.

At the end of the second quarter, CFO Harry Maccarrone said the company’s public debt was $12.9 million, down from $138.8 million in June 2000.

In today’s trading, shares of the small-cap company fell $0.20, or 7.55%, to $2.45. Over the last 52 weeks, shares have ranged between $2 and $2.98.

After reporting record results for the third quarter ended June 30, Dawson Geophysical Company (Nasdaq: DWSN) executives said on a conference call this morning that the growth is sustainable. CEO Stephen Jumper, however, cautioned that weather downtime and gaining land access permits on a timely basis are the main factors that could hamper growth.

“We believe the market to be very strong. We believe we’re performing very well on behalf of our clients,” Jumper said during the call. “We think we’re adding value to our product and our services.”

The company, which provides seismic data services to companies searching for oil and gas, said earnings were aided by the addition of three seismic data acquisition crews within the last year, increased crew productivity, improved pricing and more favorable contracts.

Jumper said he feels “very good” that the positive trends are sustainable going forward.

Before the opening bell, Dawson Geophysical announced third-quarter revenue of $68.6 million, a 65% increase from $41.5 million a year earlier, and higher than the $56.9 million expected by Wall Street. The company recorded net income of $7.5 million, or $0.99 per share, topping average analyst expectations of  $0.78 per share. In the year-earlier period the company posted a profit of $4.2 million, or $0.56 per share.

Also this morning, Dawson Geophysical announced it is increasing its fiscal 2007 capital budget to $55 million, from the previously planned $38.1 million.

The company’s third-quarter results were hindered by inclement weather conditions in early April, late June and part of July, Jumper said. In a press release, the company stated that demand for its data acquisition and processing services continues at an all-time high.

Cambridge Display Technology, Inc. (Nasdaq: OLED), Atlantic Tele-Network, Inc. (Nasdaq: ATNI) and Cache, Inc. (Nasdaq: CACH) are among the biggest percentage gainers in Tuesday's trading among companies with market capitalizations under $500 million.

Here are today's biggest percentage gainers:

Optium Corp. (Nasdaq: OPTM), DXP Enterprises, Inc. (Nasdaq: DXPE) and Intevac, Inc. (Nasdaq: IVAC) are the biggest percentage losers in Tuesday's trading among companies with market capitalizations under $500 million.

Here are today's biggest percentage losers:

Forgetting usernames and passwords for online banking, e-mail and other Internet services continues to be a headache for most computer users. During an afternoon presentation, Wave Systems Corp. (Nadsaq: WAVX) CEO Steven Sprague made the case that his company’s software will alleviate the headache of usernames without sacrificing security.

“We all know that PC security really is a mess,” Sprague told attendees of the Security Research Associates Annual Summer Growth Stock Conference in San Francisco.

Wave Systems makes software for the Trusted Computing standard, an emerging security standard that was recently mandated by Microsoft Corp. (Nasdaq: MSFT) to be part of its Vista operating system. Sprague compared Trusted Computing to the ubiquitous Ethernet networking standard.

“I come to this hotel and there’s a jack in the wall in the room – it’s exactly the same as the jack in the wall in Moscow,” he said. “Those kinds of PC industry standards have driven global adoption of technology. Trusted Computing is one of those standards.”

The Trusted Computing platform is currently supported on 50 million installed machines, he said, and should ship on over 100 million units in the next 12 months. Sprague said business computer networks need the platform for strong authentication, data protection, regulation compliance and network access control. The platform also reduces the costs of IT departments, who spend a great deal of time fixing user passwords, he said.

Sprague predicted that everyone will have computers that support Trusted Computing in four to five years.

“This train has left the station - the inevitability of Trusted platform modules on all computers is in the pipeline today,” Sprague said. “Our mission is to build the software tools and infrastructure so that PC manufacturers, enterprises and government can manage Trusted platforms and modules.”

Sprague conceded that the technology is only in its emerging stage, but that awareness is great.

“Has anyone turned this on yet? Is anybody using this?” he said. “The answer is not great yet, but the awareness is dramatically growing and we see customers like Microsoft who are making this part of their core products.”

The company’s revenue comes from the sale of hardware manufacturers who include Wave Systems’ software. Currently, Sprague said Wave Systems’ largest customer is Dell, while other key customers include Intel Corp. (Nasdaq: INTC), Seagate Technology (NYSE: STX) and Gateway Inc. (NYSE: GTW). He said the company is mentioned to anyone who is getting a sales presentation from Dell. In four to six weeks, the company will receive a royalty report from Dell, Sprague said.

Graham Corp. (AMEX: GHM), MC Shipping Inc. (AMEX: MCX) and GPC Biotech AG (Nasdaq: GPCB) are among the biggest percentage gainers in Monday's trading among companies with market capitalizations under $500 million.

Here are today's biggest percentage gainers:

Boulder Growth & Income Fund Inc. (NYSE: BIF), Alesco Financial Inc. (NYSE: AFN) and ChemGenex Pharmaceuticals Limited (Nasdaq: CXSP) are the biggest percentage losers in Monday's trading among companies with market capitalizations under $500 million.

Here are today's biggest percentage losers:

After being plagued by risky subprime loans, OceanFirst Financial Corp., Inc. (Nasdaq: OCFC) executives flaunted the company’s return to quarterly profitability during a midday conference call.

“I am pleased to report that our resilient core banking operations have finally overcome the drag of Columbia and returned the company to profitability during the past quarter as we successfully moved past the disastrous effect on our operations,” CEO John Garbarino said during the call. “We have ceased all subprime lending in Columbia and are moving to discontinue all operations at their Valhalla, New York, headquarters. Columbia, as a separate subsidiary, will cease to exist during the third quarter.”

He said all the costs associated with closing Columbia – other than the lease of its headquarters – were reflected in the company’s second quarter results. Because of the subprime problems, Garbarino said the company had to devote the majority of its attention to “investigating, identifying and providing for the losses associated with Columbia’s renegade subprime lending operations.”

Columbia Home Loans, the company’s subsidiary mortgage bank, recorded a net loss of $4.2 million during the quarter, after making millions of dollars in loans to home buyers with poor credit histories.

Before the start of trading, the Toms River, N.J.-based company reported net income of $0.27 million, or $0.02 per share, for the second quarter ended June 30. In the corresponding quarter of 2006, OceanFirst recorded net income of $4.9 million, or $0.41 per share. The company’s quarterly net interest income fell to $12.7 million, from $14.4 million in the year-ago period.

Under the company’s stock repurchase program, OceanFirst had about 0.48 million shares to buy back as of June 30. During the quarter ended June 30, the OceanFirst stockholders’ equity decreased to $123.7 million, from $132.3 million on December 31.

Deb Shops, Inc. (Nasdaq: DEBS), a Philadelphia-based teen retailer, announced it's being bought by Lee Equity Partners LLC for $27.95, or approximately $395 million. The acquisition price represents a modest 2.1% premium from Thursday's closing price of $26.68.

"We think it's a terrific platform that is under-penetrated in the U.S. and offers a significant new store rollout opportunity," Ben Hochberg, a partner at Lee Equity Partners, said in a statement.

There will be no layoffs among Deb's 3,500 employees who work at the company's 337 outlets.

Deb Shops' CFO Barry Susson said he believes the price was "very fair."

The company's same-store sales fell by 3.3% in fiscal 2007, which ended in January. In fiscal 2006, same-store sales were up 7%.

In late afternoon trading, shares of the small-cap company are up $0.06, or 0.22%, at $26.74.

The recent extremes we’ve seen in market volatility may be causing some investors to lose some sleep at night, particularly those holding more speculative, small-cap stocks.

One way to maintain exposure to the long-term upside potential of small-cap stocks without the undue risk of individual small-cap companies is to consider mutual funds or exchange traded funds that in turn buy and hold small-cap issues.

While a small-cap fund will not be immune to a market setback, it does offer the benefits of diversification and professional money management, two valuable assets during a market swoon or period of high volatility.

This week and next, I will look at small-cap mutual funds that are currently on the buy list of financial newsletter advisors. We begin with Thurman Smith, editor of Equity Fund Outlook. Smith, who has been managing funds since 1982, focuses on isolating funds that have performed well in both up and down markets.

By comparing scores for upside performance and downside performance, Smith is able to determine an “Investment Skill Quotient,” allowing him to limit his buy recommendations to only those funds with the best risk to reward ratio for both bullish and bearish periods.

Among Smith’s current buys are several funds that focus on small-cap stocks. One is the Perritt Emerging Opportunities Fund (Nasdaq: PREOX). Managers Michael Corbett and Gerald Perritt, he notes, run one of the few funds that focus on the smallest stocks.

Smith points out that the fund’s annualized return of 23.6% over its 2.9 years looks very attractive against the 17.2% return for the average small-cap value fund. He adds that with a tax impact of only 1.0 and low risk it's useful for about any account.

Smith also recommends the Perkins Discovery Fund (Nasdaq: PDFDX) among small cap funds. He notes that over its 9.3 years, it has almost doubled the return of the average small-cap blend fund. At the same time, Smith cautions, its risk exposure is a third more than that of the market.

21st Century Holding Co. (Nasdaq: TCHC), Protherics PLC (Nasdaq: PTIL) and PROSHARES TR (AMEX: SMN) are among the biggest percentage gainers in Thursday's trading among companies with market capitalizations under $500 million.

Here are today's biggest percentage gainers: