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BOJ, ECB Jolt U.S. Markets; Dole Juiced by Takeover Attempt; Lulu Loses Footing

Dan Berman
Hot Stock Minute

Markets were weighed down today by news out of Japan and Europe. The BOJ decided not to take any new action either to encourage growth or cut volatility and ECB President Mario Draghi said he won't resort to higher inflation rates to resolve the European debt crisis. That sent U.S. markets sharply lower in the morning. Stocks did stage a brief midday recovery, before finally closing in the red.

Dole Foods (DOLE) bucked the trend soaring over 20% on an unsolicited buyout offer from company CEO David Murdock. The 90-year old Murdock is already Dole's biggest shareholder with a 40% stake in the company. He previously ran the company from 1985 to 2007 and returned to the post in February. Murdock took the company public in 2009 while serving as Chairman, a post he still holds.

Shares of Lululemon (LULU) tanked 17% today. CEO Christine Day, once hailed as a sheer genius, is leaving Lulu as it tries to rebound from a yoga pants recall. The announcement came yesterday afternoon as the company released quarterly results. Lulu earned 32-cents a share, beating estimates of 30-cents but were flat from a year ago. Revenues that were also slightly higher than the consensus. Still a number of analysts have cut their price targets on Lulu and at least two have downgraded the stock. Sales tripled at the chain during the three years that Day lead the company. She plans to stay on board until a replacement is named.

Diamond Foods (DMND) climbed over 9% percent today, adding to gains of 8% yesterday. The rise comes on news that Raymond Silcock will take over as CEO, replacing Michael Murphy. The swap was announced just as Diamond reported its quarterly results. The company surprised analysts, posting earnings of 5-cents a share when estimates were for losses of 17-cents a share. However, it restated results from the prior quarter, turning a profit of 43-cents a share into a loss of 37-cents. The company has also lowered its outlook.

Sprint (S) shares rose over 2% on a sweetened takeover offer from Japan's Softbank. The new bid is $21.6-billion, 7.5% higher than the previous one. Shareholders are set to vote on the proposal tomorrow. Meanwhile, Sprint has ended negotiations with Dish Network (DISH), saying the company failed to "put forth an actionable offer." Shares of Sprint have skyrocketed over the past year, gaining more than 140%. Its latest spike occurred amid all the takeover talk.