The Russell 2000 (NYSE: IWM) fell today on news that U.S. inflation increased more than expected in November. The small-cap index dropped 15.53 points, or 2.02%, to 753.93. The Dow Jones Industrial Average (INDU) lost 178.11 points, or 1.32%, to 13,339.85.

On a year-to-date basis, the Russell 2000 is down 4.25%, while the Dow has gained 6.94% and the S&P 500 has advanced 3.62%.

The consumer price index increased 0.8% in November, according to the U.S. Labor Department. That’s the biggest climb in more than two years and above economists’ projected rise of 0.6%.

Prices were up in every single category, with energy and transportation costs leading the way, posting increases of 5.7% and 2.9%, respectively.

Consumer prices moved up 0.3% in October.

During the first eleven months of 2007, the consumer price index rose at an annual rate of 4.2%, compared with an increase of 2.5% for all of 2006.

The core consumer price index, which factors out the cost of food and energy, gained 0.3% in November. The forecast called for an increase of 0.2%.

“The top-line increase in inflation was not as worrying as the uptick in the core,” said Arun Raha, vice president of Economic Research and Consulting for the North American operations of reinsurance company Swiss Re, in an email. “That indicates that the energy price increases of the previous months are now feeding through to the core.”

Core prices are up 2.3% from November 2006, while the U.S. Federal Reserve has said that it prefers core inflation to stay in the 1% to 2% range.

“[That] complicates the Fed’s task in dealing with the credit crunch, and justifies their caution in easing just 25 basis points at the last meeting [on Dec. 11],” explained Raha.

Speaking of the U.S. central bank, today it released a separate report showing that industrial production increased 0.3% in November. Wall Street was projecting an increase of just 0.1%.

But investors did not see that as bullish news, as the figures for the previous three months were revised down. Additionally, the increase was largely due to a 1.9% rise in the production of automotive products, reflecting an increase of 0.3 million units in the assembly of light motor vehicles.

Raha thinks that won’t last.

“That boost is going to go away, since automotive production cuts for the upcoming months have already been announced,” he says. “The economy remains weak.”

Here are the day’s biggest percentage gainers and losers, along with top volume leaders, among companies with a market cap between $100 million and $750 million:

Biggest percentage gainers:

• Force Protection, Inc. (FRPT), up 30% to $6.85 on news the CEO has denied rumors the company is too dependent on one customer.
• American Dairy, Inc. (ADY), up 16% to $14 after an accounting company dismissed by American Dairy denied accusations it was let go for lack of independence.
• China Sunergy Co., Ltd. (CSUN), up 14% to $10.89 on news of an agreement to supply solar cells.

Biggest percentage losers:

• QC Holdings, Inc. (QCCO), down 23% to $11.20. A company representative could not be reached for comment.
• Phase Forward Inc. (PFWD), down 15% to $19.11 on news of an analyst downgrade.
• Georgia Gulf Corp. (GGC), down 14% to $6.60. Analysts said that chemical commodities stocks are under pressure due to the downturn in the U.S. housing sector and the uncertain 2008 economic outlook.

Volume leaders:

• Dendreon Corp. (DNDN) 24,587,000 shares traded on news of a Congressional probe into whether U.S. Food and Drug Administration advisers who questioned the company’s drug candidate were influenced by financial ties they had with Dendreon.
• Force Protection, Inc. (FRPT) 15,357,100 shares traded.
• China Sunergy Co., Ltd. (CSUN) 7,089,000 shares traded.

The day saw 99 small-cap stocks set 52-week lows, while six small caps established 52-week highs.