Last updated: June 11, 2013 9:55 pm

Dole shares jump on buyout offer as US indices fall

Shares in fruit and vegetable producer Dole jumped more than 20 per cent early in the session and retained much of their strength, but US indices moved lower as global selling took its toll on US markets.

Dole’s chief executive David Murdock made an unsolicited buyout offer of $12 per share, prompting the 22.2 per cent jump in the price to close at $12.46.

All 10 of the major sectors of the S&P 500 closed in negative territory, sending the overall benchmark down 1 per cent to 1,626.13. The financials and materials sectors fell 1.7 per cent and 1.4 per cent respectively, with major US banks among the weakest performers.

Citigroup fell 3.8 per cent to $49.95, Morgan Stanley lost 3.9 per cent to $26.09, and JPMorgan dipped 1.6 per cent to $53.49. Standard & Poor’s revised its outlook on JPMorgan to “negative” from “stable”, noting that new proposals from regulators make bailouts for creditors of bank holding companies less likely.

US indices joined overseas markets in a broad sell-off that began after the Bank of Japan put a hold on its stimulus programme. Continued speculation over an end to the Federal Reserve’s quantitative easing programme and mixed US economic data have weighed on US stocks, taking some steam out the rally so far in 2013.

The day’s losses took the S&P 500 into negative territory in the past month, down 0.5 per cent.

“I think the US equity market currently lacks conviction,” said Terry Sandven, senior equity strategist at US Bank Wealth Management. “I think it’s a period of digestion, a sideways trending market . . . I don’t think we get a meaningful direction out of the broad market for another couple of weeks.”

The Vix, which tracks implied volatility on the S&P 500, rose 10.6 per cent to 17.07. While not at a high for 2013, it is up more than 40 per cent from its March lows.

The Nasdaq Composite index was 1.1 per cent lower to 3,436.95, and the Dow Jones Industrial Average was off 0.8 per cent to 15,122.02.

Apple shares were down 0.3 per cent to $437.60 despite spending most of the day in positive territory. The company announced on Monday a new version of its mobile operating system, a move that was seen as a prelude to new iPhones and iPads later in the year.

Shares in Sony rose 0.9 per cent to $20.30. The electronics company revealed its new PlayStation 4 video game console on Monday night with a price point that was $100 less than rival Microsoft’s Xbox One. Microsoft, which recently released its own new console to concerns about pricing and whether the product had spurned its core gamer consumer, was down 1.8 per cent to $34.84.

Sony’s announcement also helped Gamestop to lead the S&P 500, up 7.8 per cent to $37.72 as investors anticipate consumers upgrading their consoles. Shares in the video game retailer are up about 50 per cent in 2013.

Shares in Google fell after news broke that the company would buy traffic map application Waze for $1bn. The tech giant was down 1.2 per cent to $879.81

Sprint Nextel shares added 2.4 per cent to $7.35 on news that SoftBank had boosted its bid for the company to $21.6bn. Dish Network, which had also launched a takeover bid for Sprint, was up 0.8 per cent to $39.17.

Yoga clothing purveyor Lululemon fell 17.5 per cent to $67.85. The company said supply issues with a new line of pants to replace defective stock would continue to hurt profitability. Chief executive Christine Day also said she would step down.

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