The Wall Street Journal-20080216-Photronics Retreats 8-4-- Arris Group Tumbles 30-

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Photronics Retreats 8.4%; Arris Group Tumbles 30%

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The smaller they were, the further they fell Friday, as small- capitalization stocks declined more than their larger counterparts, but didn't fall far enough to erase all of the early-week gains.

"I think we're going through an inflection period and trying to find a bottom," said Scott Billeadeau, director of small-cap and midcap growth strategies for Fifth Third Asset Management. "As the market sells risk, small caps are going to get hurt."

The Russell 2000 index of small stocks declined 3.80 points, or 0.54%, to 701.52 on Friday, while the Standard & Poor's SmallCap 600 fell 2.15, or 0.58%, to 369.84.

By comparison, the Dow Jones Industrial Average fell 0.23%. For the week, the Russell was up 0.37%, while the S&P SmallCap 600 rose 0.22%.

"A good third of small caps have yet to report earnings and there's a ton of skittishness as people wait for that," said Mr. Billeadeau.

Quarterly reports and earnings expectations have been especially downtrodden in the technology sector, which helped drag down the market Friday. Technology decliners included Photronics, off 96 cents, or 8.4%, to $10.44, and AMIS Holdings, falling 37 cents, or 5.3%, to 6.58.

Arris Group fell 2.41, or 30%, to 5.50, after the Suwanee, Ga., broadband local-access provider forecast a first-quarter profit below Wall Street expectations.

Bond insurers continued to be in focus after monoline insurer FGIC said it would split its profitable municipal-bond portfolios from its troubled subprime business. On the news, shares of MBIA slid 38 cents, or 3%, to 12.24, while Ambac Financial declined 31 cents, or 2.9%, to 10.22.

AsiaInfo Holdings rose 2.41, or 26%, to 11.77. The San Francisco information-technology company, which provides services and products in China, said its fourth-quarter net income jumped to $8.46 million from $2.12 million a year earlier.

NetSuite declined 2.42, or 10%, to 21.07, on the NYSE, after the San Mateo, Calif., business-software maker forecast a slower rate of sales growth for 2008. The company also said it expects to remain in the red for 2008.

Barnes Group (NYSE) slid 3.90, or 15%, to 22.44, after the Bristol, Conn., aerospace- and industrial-components manufacturer posted a 5% fourth-quarter earnings decline and forecast 2008 net income shy of analysts' expectations.

SonoSite dropped 2.55, or 7.3%, to 32.35, after the Bothell, Wash., maker of ultrasound equipment said its fourth-quarter earnings declined 27%.

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Lavonne Kuykendall contributed to this article.