Berkshire Hathaway (BRK.B) and Lubrizol (LZ) announced a definitive agreement for Berkshire Hathaway to acquire 100% of outstanding Lubrizol shares for $135 per share in an all-cash transaction. Lubrizol overall option implied volatility of 31 is near its 26-week average, according to Track Data, suggesting non-directional price movement.

General Electric (GE) closed lower on liability uncertainty related to Japan's troubled nuclear reactors. April option implied volatility of 30 is above a level of 27 from March 4 and above its 26-week average of 28, according to Track Data, suggesting larger price movement.

Options Update is by Stock Specialist Paul Foster of theflyonthewall.com.

"So far this year, 36 U.S.-traded stocks have declared stock splits, nearly triple the amount from all of last year," says Richard Moroney.

The editor of Dow Theory Forecasts -- an advisorty service that has focused on blue chip stocks for over 50 years -- explains, "We have reviewed stocks that have climbed to within 25% of the price of their last split. Below, we review four of these stocks, all potential stock-split candidates: Apple (AAPL), Lubrizol (LZ), TJX (TJX) and Varian Medical Systems (VAR).

"Is an increase in stock splits important? After all, stock splits have no fundamental impact on a company, neither creating nor destroying value.

MOST NOTEWORTHY: Continental Airlines, Inc (CAL), Molson Coors Brewing Co (TAP), Watsco, Inc (WSO), K-V Pharmaceutical Co (KV.A), Progressive Corp (PGR) and Color Kinetics (CLRK) were today's noteworthy downgrades:

• Goldman downgraded shares of Continental Airlines, Inc (NYSE: CAL) to Neutral from Buy on valuation, higher oil prices and a weak domestic market.

• Goldman also downgraded Molson Coors Brewing Co (NYSE: TAP) to Neutral from Buy based on the increase in analyst estimates, valuation and the potential for margin pressure in the summer.

• BB&T cut Watsco, Inc (NYSE: WSO) to Hold from Buy based on valuation and catalysts that are already reflected in the share price.

• Roth Capital downgraded shares of K-V Pharmaceutical Co (NYSE: KV.A) to Hold from Buy, telling clients they have learned that Par Pharmaceuticals Cos (PRX) has launched generics of 50, 100 and 200mg Toprol-XL. The firm expects a material impact to KV's 100 and 200mg strength generics.

• Stifel expects investor enthusiasm regarding Progressive's Corp (NYSE: PGR) recapitalization plan to fade as underwriting fundamentals deteriorate and cut shares to Sell from Hold.

• Color Kinetics (NASDAQ: CLRK) was downgraded to Hold from Sell at Needham on valuation...

OTHER DOWNGRADES:

• Citigroup cut The Phoenix Co's (NYSE: PNX) to Hold from Buy.

• KeyBank downgraded Lubrizol Corp (NYSE: LZ) to Hold from Buy.

• Goldcorp Inc (NYSE: GG) and Freeport-McMoRan Copper & Gold Inc (NYSE: FCX) were downgraded to Market Perform from Outperform at BMO Capital.

• Susquehanna downgraded Build-A-Bear Workshop, Inc (NYSE: BBW) to Neutral from Positive.

Analyst summaries provided by TheFlyOnTheWall.com (subscription required).