Market Minute: Warren Buffett Snaps Up NV Energy; Costco Earnings Rise

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Warren Buffett is on the prowl again, and Costco bulks up its bottom line.

The Dow industrials (^DJI) fell 106 points Wednesday, the same amount they had gained Tuesday. The S&P 500 (^GSPC) lost 11 points and the Nasdaq (^IXIC) dropped 21 points.
berkshire hathaway ceo warren buffett nv energy
Nati Harnik/APBerkshire Hathaway CEO Warren Buffett


Warren Buffett's Berkshire Hathaway (BRK.B) is making another multi-billion dollar acquisition. It's buying Nevada-based utility NV Energy (NVE). The deal values the company at $5.6 billion.

Retail-giant Costco Wholesale (COST) reports a 19 percent jump in quarterly earnings, slightly better than Wall Street expectations. The company continues to benefit from the shaky economy, as consumers make bulk purchases to save money.

Moody's has lowered its credit rating on Alcoa (AA) to junk status. Moody's says weakness in the aluminum industry will make it very tough for the company to cut its debt levels. Alcoa -- one of the 30 Dow stocks -- trades at just $8.50 a share. It's one of the few blue chips to have lost ground during the past year. The ratings downgrade could raise the company's cost of borrowing.

Royal Caribbean (RCL) says the fire aboard the Grandeur of the Seas earlier this week will reduce earnings in the current quarter by 10 cents a share. The ship is expected to be out of service for about six weeks. The company's website calls the ship "newly renovated." Now those renovations are undergoing renovations.

A new twist on the fast food burger. USA Today reports that Wendy's (WEN) is planning to roll out a pretzel burger -- a sandwich using a soft pretzel instead of a roll.

Shareholders at Exxon-Mobil's (XOM) annual meeting overwhelmingly voted down a proposal to ban discrimination against gay workers. It's the 14th straight year the proposal was rejected.

And you'll soon have a chance to own a piece of the Empire State Building. More than 80 percent of shareholders in the private company that owns the famed building here in New York have voted in favor of an initial public stock offering.

Check back after the market closes Thursday for the new Daily Finance closing bell report.

-Produced by Drew Trachtenberg

Market Minute: Warren Buffett Snaps Up NV Energy; Costco Earnings Rise
One critical question is what sort of celebrity Twitter user Buffett will turn out to be: the laissez-faire famous person who rolls with the hoi polloi's punches, or the hypersensitive control freak who cannot brook the slightest mischief or criticism? There's only one way to find out which alternative Buffett favors, and that's to test him through vigorous trolling.

There are lots of options. Many conservatives dislike Buffett -- whom they might be expected to admire, given his enormous investing success and cheerful advocacy for the U.S. economy -- because of his support for Barack Obama. Particularly galling has been his endorsement of the president's proposal for higher taxes on upper income earners, encapsulated in the so-called Buffett Rule. Buffett's invocation of his secretary, who he has said pays more in federal taxes as a proportion of income than he does, has become a source of mockery; why not ask Buffett why the secretary of the richest investor on Earth isn't a member of the one percent herself? Seems only "fair," to use a word the president favors in this connection.

For those on the left, Buffett's status as arch-capitalist dealmaker offers a few openings. There have, for instance, been questions about what he knew, and when he knew it, before making a $5 billion investment in Bank of America (preferred shares, of course) in August 2011. Shortly after Buffett's purchase, word got out of extensive job cuts (40,000 employees) and the firings of two executives -- restructuring moves likely to raise the bank's stock price. "Did [Buffett] have inside information that other investors were not aware of?" asked bank analyst Richard Bove. "Did he know that there were going to be these two major announcements at the time he made his investment? If he did know, I think it is illegal." These questions are under 140 characters, so have at it.
Bagging the scalp of a verified Twitter user for your followers list can seem like a daunting task. You can do it, though, take it from me: for some reason, I'm being followed by POLITICO's chief economics reporter.

Buffett -- who currently follows zero accounts, despite having received tweets of welcome from such luminaries as @BillClinton, @BillGates, and @BarackObama -- seems like a hard nut to crack. You might have a slight advantage if you're female, since, in the words of a recent essay written for Fortune (and promulgated as his second tweet), "Buffett is bullish... on women." It might also help if your avatar is a picture of a Cherry Coke Can. Buffett failed to identify his favorite soda in a blind taste test conducted by Bloomberg, so we're guessing it's the #branding he likes.
Once you've gotten Buffett to follow you, you'll be able to send him a DM, Twitter's private and confidential telegram. This is an ideal step toward actually hanging with Buffett, which is generally a possibility only for those rich enough to partake in charity auctions. (Last year's winning bid for lunch with Buffett was $3.46 million.)

Some activities that might pique our subject's interest, and which you might consider suggesting: playing bridge, which Buffett once said "is such a sensational game that I wouldn't mind being in jail if I had three cellmates who were decent players and who were willing to keep the game going twenty-four hours a day"; flying around in his private plane, which he once identified as one material thing that makes his life more enjoyable; or reading the newspaper. Buffett owns more than 70 of them, reads five a day, and recently admitted, "It's almost unnatural how much I love newspapers."
Sometimes, those with large Twitter followings will lend their extensive reach to lesser entities looking to spread a worthy message. As a consequence, the retweeted account often gains additional followers. #WinWin.

Buffett has just surpassed 400,000 followers, an impressive rate of influence-accrual. And he has an intense affection for charity, having pledged to donate more than 99% of his wealth. So your best bet, if you want that @WarrenBuffett RT, is to ask nicely on behalf of a good cause.

 Buffett has given $50 million toward anti-nuclear proliferation efforts, calling the bomb "the great problem of mankind," and in 2006 auctioned his 2001 Lincoln Towncar (with "THRIFTY" vanity license plate) to benefit Girls Inc. So, something anti-nuclear and feminist? "Launch women-owned businesses, not thermonuclear warheads." Could work.
For companies, a stock purchase by Buffett is more than a welcome dose of capital; it's a vote of confidence from history's most storied value investor (i.e., one who seeks strong businesses whose shares are underpriced). An endorsement via Twitter could have similar significance.

The recent hack of the Associated Press account showed that even fraudulent tweets can have dramatic effects on trading. Crack Buffett's Twitter password, send a few market-moving tweets under the aegis of that coveted blue-and-white check mark, and you might be able to make off with a lot of money. Or you could just short Berkshire Hathaway and announce the famously long-serving Buffett's retirement, effective immediately. That would be simpler.

I should add that, although one legal expert told 9NEWS that "the prosecution and punishment for whoever hacked the Associated Press Twitter account ... is uncertain," the federal charges against former Reuters deputy social media editor Matthew Keys show that the government is willing to make aggressive use of the Computer Fraud and Abuse Act of 1984 in cases that catch its interest. So you mess with Buffett's Twitter business at your peril. We certainly don't condone such unscrupulous use of social media. #ItWasJustAThought.
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