Dozens homeless in southwest Mexico after big quake

HUIXTEPEC, Mexico (Reuters) - Dozens of families cleared rubble from their destroyed homes in southwestern Mexico on Wednesday following a major 7.4-magnitude earthquake that caused landslides, knocked down school walls and cracked a church tower.

At least 100 houses collapsed and 1,000 were damaged near the epicenter of Tuesday's quake in the municipality of Ometepec inGuerrero state, said Jorge Catalan, an official from the Ministry of Social Development.

No one was killed, but many residents, terrified by repeated aftershocks, spent the night outside and officials said they were preparing shelters and food for those who lost their homes.

Eleven people were injured in the tremor, the strongest to hit the country since the devastating 8.1-magnitude quake of 1985 that killed thousands in Mexico City.

The hardest-hit place in Guerrero was Huixtepec, a village of a few thousand people, said Admiral Sergio Lara, the local navy commander. About 40 percent of its homes were severely damaged, and only about one in five was unscathed, he said.

Standing outside the rubble of his own home and those of his extended family, 37-year-old farmer Amancio Morales said he expected to be homeless for the foreseeable future.

"Here we only make 100 pesos ($7.87) a day. To rebuild everything - we just don't have enough," he said.

All 50 or so members of his wider family were now sleeping outdoors, he added.

END OF THE WORLD

Large boulders from landslides blocked the road to the nearby small town of Paso Cuaulote, where nearly all 150 villagers, who grow beans and corn, were hit.

"I thought the world was going to end," said farmer Vicente Santiago, 30, surveying a crumbled wall in his father's cinder block home. His father, taking a nap when the quake hit, escaped unharmed even after the roof caved in.

Maria Lopez, 33, fled her home with her 2-week-old baby boy and spent the night by the river with the rest of the town.

"Rocks were falling from the mountainside onto the house," said Lopez clutching her baby outside her seriously cracked mud-brick home.

Students picked their way through rubble-strewn classrooms on Wednesday at one of the three primary schools damaged in the municipality. "The children were shouting. We had to evacuate," said teacher Abel Hernandez.

In the nearby town of Igualapa, one of the towers on the colonial-era church crumbled, although locals were still holding a service inside.

In Mexico City, residents were largely spared, with only small cracks in buildings and minor damage to one subway line and a bridge. Mexico City is about 200 miles north-northeast of the epicenter.

The capital's repair bill for the quake, which was felt as far away as Guatemala should come in under $2 million, Mayor Marcelo Ebrard said.

The type of the earthquake - it shook the city from side to side rather than up and down - and better construction regulations since 1985 saved the city from more serious damage, Ebrard told national television.

That was scant consolation to villagers in hilly parts of Guerrero left without a roof above their heads.

Among the locals forced to sleep outdoors by the quake in Huixtepec was a woman of about 90, Angela Hernandez.

"It was so cold last night," she said. "We need help - wood or cement or anything."

(Additional reporting by Elinor Comlay in Mexico City; Writing by Mica Rosenberg; Editing by Peter Cooney)

Apple's dividend heralds 'changing of the guard'

SAN FRANCISCO (AP) — What would Steve have done?

It's a question that Apple CEO Tim Cook can't escape. From the naming of the new iPad to his choice of clothing at public events, company-watchers parse Cook's every move, looking for differences between him and the company's revered founder Steve Jobs.

But Cook seems determined to stamp his own legacy on the world's most valuable company. In the biggest break from Jobs' philosophy since Cook succeeded him as CEO seven months ago, Apple is dipping into its nearly $100 billion cash stash to start paying a quarterly dividend of $2.65 per share to its stockholders.

The commitment announced Monday draws a clear line of demarcation between Cook and Jobs.

"This is indicative of the changing of the guard at Apple," says ISI Group analyst Brian Marshall. "I don't think this would have happened under Steve Jobs. This clearly shows Tim Cook is his own man."

Jobs hoarded cash like a man afraid of running out of it. Plagued by memories of Apple's flirtation with bankruptcy in the late 1990s, he steadfastly resisted calls for the company to pay a dividend. Jobs never wanted Apple to be so destitute that it would need financial help, as it did in 1997 when he negotiated a $150 million infusion from rival Microsoft Corp.

With Cook in charge, Apple is now ready to herald a new era and dole out about $10 billion in dividends each year. It's an amount that Apple can easily afford, given the size of its current bank account and the billions more pouring in amid feverish demand for its iPhones, iPads and iPods.

Obviously, no one knows what Jobs would have thought about Apple paying a dividend. He died Oct. 5 after a long battle with cancer. It's unclear whether he had softened his stance on the dividend by the time he resigned as CEO last August.

The dividend decision didn't fall entirely to Cook. It required the approval of Apple's eight-member board of directors, which hasn't changed in the past year except for the addition of Cook and the loss of Jobs. Cook joined the board when he became CEO.

Apple's board had been discussing a possible dividend since at least January, based on what Cook has publicly told analysts and Apple shareholders.

Analysts and investors viewed the dividend as a sign of Cook's willingness to listen to shareholders.

"The new management is very shareholder friendly, and it has been very nice to see," says Sterne Agee analyst Shaw Wu.

Longtime Apple shareholder Asif Khan believes the dividend suggests that Cook is serious about honoring one of Jobs' final bits of advice. Based on published accounts, Cook told Apple employees at an Oct. 19 memorial that Jobs wanted management to "just do what's right" instead of trying to figure out what the company's late leader would have done.

"It's an intriguing moment in Apple's history because this is a departure from Steve's philosophy," says Khan, whose family has accumulated 20,000 Apple shares since 1997 when Jobs returned to the company. Cook "is changing the culture of the company just a little bit, but in a good way. Everything I have seen him do so far seems to be making Apple into a kinder and gentler company."

Before Apple's dividend announcement, Cook's most significant change from the Jobs' regime had been to introduce a company program that matched employee donations to charities of up to $10,000.

Cook, who worked closely with Jobs since joining Apple in 1998, has made it clear he still intends to hew to the vision of his predecessor and mentor. Just last month, Cook told Apple shareholders that he still thinks of Jobs every day he goes to work.

Forgetting Jobs would be nearly impossible for Cook to do anyway, given the comparisons that are regularly made between the two. Some Apple fans even comment on how Cook's fashion tastes deem to differ from Jobs, who adopted a pair of jeans and a mock black turtleneck as his daily uniform. Cook seems to favor button-up shirts in his public appearances.

Cook hasn't come close to matching Jobs' panache. The missing pizazz stood out earlier this month at Apple's unveiling of its latest iPad. Cook spent relatively little amount of time on stage, leaving most of the presentation to several of his top lieutenants. "Steve was a vibrant and charismatic figurehead, so it's really not fair to compare Tim's persona to that," says Creative Strategies analyst Tim Bajarin, who has been following Apple for 32 years.

Apple didn't even bother anointing the third-generation iPad with a distinctive name, prompting some Apple pundits to wonder whether the company might have tried to come up with something more creative if Jobs were still running things.

Not that it mattered. The latest iPad set a new sales record during its first weekend in stores, Cook said during a Monday conference call to discuss the dividend.

That's just the latest example of Apple's growing prosperity under Cook's leadership.

The company's stock price has soared 60 percent since Cook became CEO to propel Apple's market value to $560 billion — the most in the world. The shares hit a new high Monday before closing at $601.10, up $15.53. In Apple's first quarter following Jobs' death, the company generated more revenue than any other three-month period in its 36-year history.

Apple is doing so well now that analyst Wu expects Apple to add another $70 billion to $85 billion to its cash hoard this year. That works out to an average of $1.3 billion to $1.6 billion in cash per week.

"You would have to give Tim an 'A plus' as CEO so far," Bajarin says. "This is probably the best transition in corporate leadership that we have ever seen. And you really have to give Steve credit for that. He really spent the last four years of his life making sure the company would be prepared to carry on without him."

Fans, entrepreneurs among first buyers of new iPad

MADISON, Wis. (AP) — Apple's latest iPad drew the customary lines of die-hard fans looking to be first and entrepreneurs looking to make a quick profit.

Many buyers lined up for hours, and in some cases overnight, as thetablet computer went on sale in the U.S. and nine other countries. They did so even though Apple started accepting online orders a week ago.

The new, third model comes with a faster processor, a much sharper screen and an improved camera, though the changes aren't as big as the upgrade from the original model to the iPad 2.

As with the previous models, prices start at $499 in the U.S.

"I don't think it's worth the price but I guess I'm a victim of society," Athena May, 21, said in Paris.

Dan Krolikowski, 34, was first in line at a Madison, Wis., mall. He arrived 14 hours before the store's opening and was buying an extra one to sell on the "gray market."

"Last year I sold one on eBay and made over $500 in profit," Krolikowski said, leaning back in a reclining lawn chair he brought. "I'm hoping to do that again this year."

Those who ordered iPads online started getting them delivered Friday. However, Apple now says there's a two- to three-week shipping delay for online orders. There's also demand in countries where the new iPad isn't available yet.

In Hong Kong, a steady stream of buyers picked up their new devices at preset times at the city's sole Apple store after entering an online lottery.

The system, which required buyers to have local ID cards, helped thwart visitors from mainland China, Apple's fastest growing market. A release date in China has not yet been announced. Apple will begin selling the iPad in 25 additional countries next Friday, mostly in Europe.

At Apple's flagship retail store on New York's Fifth Avenue, the composition of the line, and the way many customers were paying for two iPads each with wads of cash, suggested that many of the tablets were destined to be resold abroad.

The gadget also drew entrepreneurs of a dubious nature. In Orlando, Fla., authorities arrested a Best Buy employee and a former worker early Thursday on accusations they schemed to rob a store at gunpoint and steal more than $1 million in iPads and other Apple products, according to the Orlando Sentinel.

About 450 people lined up outside Apple's Ginza store in downtown Tokyo. Some had spent the night sleeping outside the store.

Dipak Varsani, 21, got in line in London at 1 a.m. Thursday local time and said he was drawn by the new device's better screen.

"You've got clearer movies and clearer games," he said. "I use it as a multimedia device."

Despite competition from cheaper tablet computers such as Amazon.com Inc.'s Kindle Fire, the iPad remains the most popular tablet computer. Apple Inc. has sold more than 55 million iPads since its debut in 2010.

Apple says the iPad is propelling us into a "post-PC era," with computers that work very differently from the traditional laptops and desktops.

Two years after the debut of the first iPad, the device's launch has become the second-biggest "gadget event" of the year, after the annual iPhone release. In Atlanta, one kid in line carried a sign that read "Happy iDay!"

Many said they lined up for the atmosphere, rather than ordering online.

"Sure, it's a marketing ploy, but I still love the experience," said Pam Johnson, 58, a Portage, Wis., writer who traveled about an hour to the Madison store. "You have great conversations. You learn a lot. You don't get that when you just sit at home and wait for it to be delivered to your doorstep."

___

Peter Svensson reported from New York. Kelvin Chan in Hong Kong, Robert Barr in London, Sharon Chen in Singapore, Malcolm Foster in Tokyo, Kathy Matheson in Philadelphia, Thomas Adamson in Paris and Johnny C. Clark in Atlanta contributed to this report.

Bank of America's stock soars after passing stress test

(Reuters) - Bank of America Corp shares on Wednesday hit their highest level in seven months after a Federal Reserve stress test affirmed one of the more troubled U.S. banks had made progress in improving its capital levels.

The second-largest U.S. bank had been expected to pass the review, but its conservative capital plan allowed it to contrast with other banks, notably Citigroup Inc , that had their proposals for dividend increases and share buybacks denied by the Fed.

Last year, the Fed rejected a modest dividend increase the bank had requested, embarrassing Chief Executive Brian Moynihan. This year, Bank of America said it wasn't asking to hike its penny-per-quarter payout or to buy back shares. Instead, it would continue to build capital as it works to absorb mortgage-related losses and meet new international standards.

Bank of America's performance in the stress test was "adequate" and without the drama of last year, said Gary Townsend, chief executive of Hill-Townsend Capital in Maryland, which invests in bank stocks.

"For once, they read the body language of regulators and didn't push the envelope as Moynihan did last year," Townsend said.

The move gave the bank better capital ratios under the stress test than nine of 19 banks when counting proposed dividend increases and share buybacks. But it also left the bank out of another round of improved payouts to shareholders.
"Higher quality" banks such as JPMorgan Chase & Co , Wells Fargo & Co and U.S. Bancorp began to differentiate themselves from other banks with higher dividend yields and share repurchase plans, said Guggenheim Partners analyst Marty Mosby. JPMorgan, for example, on Tuesday got approval to boost its quarterly dividend to 30 cents per share from 25 cents, compared to Bank of America's 1 cent.
Still, Mosby noted conservative capital plans such as Bank of America's were better received by the Fed than more aggressive ones. Citigroup and SunTrust Banks Inc did not stay above the minimum capital threshold when including their plans for dividends and buybacks. Details of those rejected plans were not disclosed.

After showing it was able to pass the stress test, Bank of America could be in a position to ask for a modest dividend increase next year but no share buybacks, Mosby said. The bank needs to keep accumulating capital to meet so-called Basel III capital standards, which will start being phased in next year, he noted.

While banks have until 2019 to meet the new requirements, "it's better to show they can get there pretty soon," he said.

Bank of America's shares climbed 4.1 percent to close at $8.84, while the KBW Bank Index rose 1.3 percent. For the year, the bank's shares are up about 59 percent, after falling 58 percent last year on concerns about the bank's capital.

Some of the numbers released by the Fed detail the challenges that still await Charlotte, North Carolina-based Bank of America. Of the 19 banks, the Fed expected Bank of America to lose the most before income taxes from the fourth quarter of 2011 to the fourth quarter of 2013 under the stress scenario: $51.3 billion. Citigroup fared the second worst, with a projected loss of $50.3 billion.

The Fed emphasized that its estimates were not forecasts of expected losses and that the hypothetical stress scenario, which included U.S. unemployment of 13 percent, was more adverse than expected.

Under the scenario, Bank of America was expected to experience loan losses equal to 8.3 percent of its average balances, compared to the average of 8.1 percent for the 19 banks. Its home-equity portfolio would experience losses of 15 percent, compared to 13.2 percent for all of the banks.

Bank of America showed progress in improving its capital levels, even though additional capital it built in the fourth quarter of 2011 was not counted. But the stress tests also highlighted its other major challenge: revenue.

Under the stress scenario, the Fed said Bank of America would have net revenue before loan-loss provisions of $40.1 billion, trailing JPMorgan ($59.3 billion), Wells Fargo ($53.3 billion) and Citigroup ($41.2 billion). The revenue figure, which also covers the fourth quarter of 2011 through the fourth quarter of 2013, includes expenses from investor requests to buy back soured mortgage loans and foreclosure costs, one of Bank of America's biggest troubles.

(Reporting By Rick Rothacker; Editing by Alwyn Scott and Bernard Orr)

Stocks record biggest gains of year; Dow up 218

NEW YORK (AP) — Bank stocks turbocharged a rally across the financial markets Tuesday, and all three major stock indexes posted their biggest gains of the year. The Dow Jones industrial average rose 218 points and closed at its highest level since the last day of 2007.

The Nasdaq composite closed above 3,000 for the first time since December 2000, when dot-com stocks were collapsing.

There was already plenty of good news driving the market higher Tuesday: Retail sales in February increased the most since September, and the Federal Reserve said it expected the unemployment rate to keep falling.

Then the market soared in the final hour after JPMorgan Chase, the country's largest bank by assets, announced that it plans to buy back as much as $15 billion of its stock and raise its quarterly dividend by a nickel to 30 cents per share.

JPMorgan said it was acting with the blessing of the Federal Reserve, which was preparing to announce the results of a review to make sure banks have enough cash to withstand a financial crisis worse than what happened in 2008.

"That's what really made the day," said Jeffrey Kleintop, chief market strategist at LPL Financial.

JPMorgan Chase stock soared 7 percent, and other banks followed. Citigroup and Goldman Sachs gained 6 percent. Banks were easily the best-performing stocks in the market, gaining almost 4 percent as a group.

The Fed had planned to release the results of its review, known as a stress test, for 19 financial institutions Thursday after the market closed. After JPMorgan Chase made its announcement, the Fed pulled a surprise.

The central bank released its stress test results a half-hour after the markets closed Tuesday — two days ahead of schedule. JPMorgan Chase and 14 other financial institutions passed. Four, including Citigroup, failed.
Citigroup stock was down 4 percent in after-hours trading following the Fed announcement.
The Dow finished at 13,177.68, its highest close since Dec. 31, 2007. Tuesday's close put the Dow within 1,000 points of its record, 14,164.53, set in October 2007. All 30 stocks in the Dow closed higher, the first time that has happened this year.

The Nasdaq composite index rose 56.22 points, or 1.9 percent, to 3,039.88.

On Dec. 11, 2000, the last time the Nasdaq closed above 3,000, it was in the middle of a horrifying slide — from a peak above 5,000 in March 2000 to just above 1,100 in October 2002.
At the beginning of 2000, the peak of the dot-com frenzy, investors valued stocks in the Nasdaq composite index at an astronomical 175 times their per-share earnings.
Google was not yet a public company, and the iPod didn't exist. Apple made about $800 million that year. Many Nasdaq companies were Internet startups with high stock prices but big losses.
And many of them failed, taking the Nasdaq down with them.
Jack Ablin, chief investment officer at Harris Private Bank, said the key difference between the Nasdaq then and now is that the technology companies that dominate the index only promised profits 12 years ago.
"The Nasdaq hasn't done much of anything for 12 years, but it's had a huge rally in earnings," Ablin said.

Today, the profits are real. The Nasdaq composite, which includes more than 2,500 companies, trades at about 24 times earnings, according to Birinyi Associates. Apple's profit last year was almost $26 billion.

The Standard & Poor's 500 index closed up 24.87 points, or 1.8 percent, at 1,395.96, its highest level since June 5, 2008. The S&P has gained 11 percent since Jan. 1, more than an average year. The S&P is a 12 percent rally from its record of 1,565.15.
Brian Gendreau, market strategist at Cetera Financial, said stocks could still go higher. Investors are paying roughly 14 times the past year's earnings for the S&P 500 index. The long-term average is closer to 15, and it's not uncommon for stocks to trade higher than the long-term average and for many years.
"Valuations are still very cheap," he said.
The dollar rose against the euro and hit an 11-month high against the Japanese yen after the Federal Reserve assessment. The euro fell to $1.3073 late Tuesday from $1.3150 late Monday. The dollar soared to 83.08 yen from 82.26 late Monday.
The retail sales report showed a gain of 1.1 percent last month. Some of it reflected higher gas prices, but Americans also spent more on cars, clothes and appliances. Department stores had their biggest gains in more than a year. The government also revised its estimates higher for December and January.
A reading of confidence among small business owners also rose in February for the sixth month in a row. The National Federation of Independent Business optimism index reached its highest level in a year, helped by an increase in expected sales.
The rally gained strength in the afternoon when the Federal Reserve said it saw signs of an improving economy and expected the unemployment rate to keep falling. The Fed also said strains in the global financial markets have eased.
The combination of strong retail sales and the Fed announcement dampened hopes that the Fed would buy more bonds to stimulate the economy, and traders dumped U.S. Treasury debt. The yield on the 10-year Treasury note climbed as high as 2.12 percent, its highest since October.
Among companies making big moves:
— Great Wolf Resorts jumped 27 percent to $5.13. Apollo Global Management said it has agreed to buy the indoor water park operator for $5 a share.
— Urban Outfitters dropped 5.3 percent, the worst drop in the S&P 500 index. The retailer reported earnings that fell below what analysts were expecting after it had to mark down prices on women's clothing at its Anthropologie and Urban Outfitters stores.

— Carmike Cinemas soared 17 percent. The Georgia-based movie theater chain reported earnings and sales that far outpaced what Wall Street analysts had expected.

New iPad expected to have modest upgrades

NEW YORK (AP) — Apple is expected to reveal a new iPad model on Wednesday, with a sharper screen and perhaps an option for faster wireless broadband. The upgrades are relatively minor, but the iPad is secure in its position as the king of tablets.

As usual, Apple has kept the features of the new device secret. No matter what they are, analysts expect the new iPad to be a success, riding on the popularity of the previous models, as well as pent-up demand from consumers who have been waiting for the new model.

The iPad 2 was a big step up from the original iPad, since Apple included a camera and reduced both the thickness and the weight of the device. But there isn't that much Apple can do to jazz up the iPad 3. Company watchers expect the new device to have the same basic size and weight as last year's model.

Nearly a year ago, the iPad 2 went on sale nine days after it was revealed. Apple watchers expect similar timing this year.

Some of the rumored new features include:

— A sharper screen, similar to the "Retina Display" on the iPhone 4 and 4s. The rumored resolution is 2048 by 1536 pixels, which would make text look smoother and some high-resolution pictures look better. It won't make much of a difference for images on the Web, or video.

Some speculate that Apple will call the model the "iPad HD," for "high definition," rather than "iPad 3."
— The new iPad could include Siri, the voice-activated "assistant" found on the iPhone 4S. Siri has gotten mixed reviews, but Apple has been touting the feature heavily in its advertising, and it would make sense to expand the availability of this high-profile feature.
— Faster wireless capabilities. IPads are available with built-in modems for AT&T's and Verizon's third-generation, or "3G" cellular networks in the U.S. The iPad 3 could come in a version that offers faster "4G" or "LTE" networks. However, most iPads are used only on Wi-Fi, so an "LTE" chip wouldn't matter to most buyers.
In this respect, Apple is playing catch-up. Some competitors, such as Samsung and Motorola, already sell LTE-compatible tablets.
Since last fall, Sprint Nextel Corp. has sold the iPhone. But it doesn't sell the iPad. It's possible it could join AT&T and Verizon Wireless in selling the iPad 3.
— A faster processor. This is pretty much a given, since every new iPhone or iPad has improved on the computing power of its predecessor. But few users complain about their iPads being slow, so this should not be a major selling point.
Sarah Rotman Epps, an analyst for Forrester Research, said hardware features aren't that important to tablet buyers.
"It's about the services — what you can do with the device," she said in a blog post.
Apple's competitors have slowly come to realize this, but only after bringing out dozens of tablets with whiz-bang features like 3-D cameras. The competitor that's done the best is Amazon.com Inc. Its Kindle Fire tablet is cheaper than the iPad, but what really sets it apart is that it's tied into Amazon's book, movie and music stores, making it an easy route to entertainment, just like the iPad.
Still, the Kindle Fire has a long way to go. Epps estimates that Amazon sold 5.5 million Kindle Fires in the fourth quarter of last year. Meanwhile, Apple sold 15.4 million iPads, and has sold 55.3 million in total.
According to Canaccord Genuity, 63 percent of the tablets shipped last year were iPads. The only competitors with more than 5 percent market share were Amazon and Samsung Electronics Co.
The iPad launch comes as Apple has reached a rare milestone: last week, it was worth more than $500 billion. Only six other U.S. companies have been worth that much, and none have held that valuation for long. On Tuesday, Apple's stock had fallen, bringing its market value down to $493 billion, but analysts believe the company is worth closer to $550 billion.
One big unknown is whether Apple will keep the iPad 2 in production at a lower price, like it kept the iPhone 3GS after the launch of the iPhone 4. If so, the iPad 2 could carry a price tag that would make consumers think twice about buying a Kindle Fire.
Another big unknown is whether Apple will reveal its rumored foray into making TV sets. Some have speculated that the invite to the Apple event, which said "We have something you really have to see," points in that direction.
Apple already sells and "Apple TV," but that's a small box that attaches to a TV set to display movies and play music from iTunes.

Bankruptcy threat to iPad trademark challenger

SHANGHAI (AP) — A major creditor of Proview Electronics, which is challenging Apple Inc.'s use of the iPad trademark, has moved to have the ailing computer monitor maker liquidated, reports said Monday.

Taiwan-based Fubon Insurance is seeking $8.68 million in debts and has filed an application to have Proview declared bankrupt, the reports by the Xinhua News Agency and other mainland media said.

Proview's mainland Chinese subsidiary is based in the southern export zone of Shenzhen, where an official at the city's Intermediate Court said he expected an announcement regarding the case soon.

"It's a sensitive case in a sensitive period of time, so we won't comment or release information while we will have an announcement in the near future," said the official who gave only his surname, Zhu.

Proview lawyer Ma Dongxiao said the company believes its financial problems won't affect the handling of a court case in which Apple is appealing a ruling against its claim to the iPad trademark in China.

Apple says it bought the trademark from Proview Electronics in 2009. Proview is suing Apple in the U.S., seeking to have that deal ruled invalid. It says the 35,000 British pound ($55,000) deal did not include the mainland Chinese iPad trademark, which was owned by the mainland unit, Shenzhen Proview Technology.

Fubon staff in China refused comment Monday. A court official in Shenzhen, who refused to be named, likewise said he could not comment on the liquidation order.

Proview's mainstream computer monitor business fell on hard times in 2008 and the company is liquidating assets as it goes through a restructuring. Its main product line is now LED street lights.

It has urged Apple to settle out of court, presumably for far more than the 2009 deal, in exchange for ending the trademark dispute.

Apple has evinced no interest in such a settlement, saying it believes it owns the iPad trademark.

___

Researcher Fu Ting in Shanghai contributed to this report.

WikiLeaks publishes leaked Stratfor emails

LONDON (AP) — Private intelligence firm Stratfor is in the business of shedding light on the world for its many clients. On Monday, anti-secrecy group WikiLeaks was the one shedding light on Stratfor, saying it had more than 5 million of the company's emails and would publish them in collaboration with two dozen international media organizations.

The small selection so far published on WikiLeaks' website gives a look at the daily routine of the Texas-based think tank, whose clients range from local universities to global megacorporations. One described a $6,000-a-month payment made to a Middle Eastern source, another carried bits of gossip dropped by a retired spy, and many were filled with off-color office banter.

An initial examination of the emails turned up a mix of the innocuous and the embarrassing, but WikiLeaks chief Julian Assange promised more explosive material in the coming weeks.

"What we have discovered is a company that is a private intelligence Enron," Assange told London's Frontline Club, referring to the Texas energy giant whose spectacular bankruptcy turned it into a byword for corporate malfeasance.

Assange accused Stratfor of funneling money to informants through offshore tax havens, monitoring activist groups on behalf of big corporations and making investments based on its secret intelligence.
Stratfor denied there was anything improper in the way it dealt with its contacts.
"Stratfor has worked to build good sources in many countries around the world, as any publisher of global geopolitical analysis would do," the company said in a statement. "We have done so in a straightforward manner and we are committed to meeting the highest standards of professional conduct."
The Stratfor statement suggested the company wouldn't be commenting further on Assange's allegations.
"Having had our property stolen, we will not be victimized twice by submitting to questioning about them," the statement said.

How WikiLeaks got the company's emails remains unclear. Assange refused to answer questions about the matter Monday, but Stratfor said the messages appeared to be the same ones stolen by hackers in December. That breach, claimed by the Internet activist group Anonymous, ravaged the company's servers and led to the disclosure of thousands of credit card numbers and other information.

Wired magazine quoted an unnamed member of Anonymous as saying that the stolen data had been transferred to WikiLeaks, which allegedly acknowledged receiving the transfer using a coded message on Twitter. Anonymous appeared to confirm that account, pointing to the cryptic message "rats for donavon," which WikiLeaks posted on Dec. 30.
Several media groups, including Rolling Stone magazine and German broadcaster NDR, said they have been offered advance access to the emails and will publish stories based on the documents if appropriate.
It's unclear what impact the leak will have on Austin, Texas-based Stratfor. The company counts investment firms, academic institutions and major multinationals among its clients, and one academic said that the disclosure would likely scare away corporate clients.

"When people discover, 'Hey, here's your clients,' then your clients are chilled," said Jeffrey Addicott, the director for the Center of Terrorism Law at St. Mary's University in San Antonio, Texas. "It causes a certain uproar."

Some clients are already facing questions. Among the emails are reports apparently compiled for The Dow Chemical Co. on activists who have targeted the company over its links to the Bhopal gas leak disaster, which killed thousands of Indians and spawned a long-running legal battle.
Dow said in a written statement that "major companies are often required to take appropriate action to protect their people and safeguard their facilities," adding that it operated within the law.
The reports prepared for Dow appeared to be little more than roundups of news stories and Internet chatter, but Stratfor also boasts of more serious sources.
One leaked email quotes Stratfor Vice President of Intelligence Fred Burton bragging about his "trusted former CIA cronies." In another, he promises to "see what I can uncover" about a classified FBI investigation.
Messages left for Burton weren't immediately returned. Stratfor has speculated that some of the leaked emails may have been altered or forged, although the firm did not provide any evidence of tampering. Anonymous said in a Twitter message that the suggestion of forgery was "pathetic."
Another Stratfor email warned about letting people know too much about how the company operated.
"I think showing too much of our inner workings devalues our Mystique," the email said. "People don't know how we collect our intelligence and that's one of the cool, mysterious things about STRATFOR."
___
Associated Press writers Paul Weber in San Antonio, Texas and David Rising in Berlin contributed to this report.
___
Online:

WikiLeaks: http://wikileaks.org/

Stratfor: http://www.stratfor.com/

Insight: Conflict looms in South China Sea oil rush

PUERTO PRINCESA, Philippines (Reuters) - When Lieutenant-General Juancho Sabban received an urgent phone call from an oil company saying two Chinese vessels were threatening to ram their survey ship, the Philippine commander's message was clear: don't move, we will come to the rescue.

Within hours, a Philippine surveillance plane, patrol ships and light attack aircraft arrived in the disputed area of Reed Bank in the South China Sea. By then the Chinese boats had left after chasing away the survey ship, Veritas Voyager, hired by U.K.-based Forum Energy Plc.

But the tension had become so great Forum Energy chief Ray Apostol wanted to halt two months of work in the area.

"They were so close to finishing their work. I told them to stay and finish the job," Sabban, who heads the Western Command of the Philippine Armed Forces, told Reuters at his headquarters in Puerto Princesa on Palawan island.

Over the next few days, President Benigno Aquino would call an emergency cabinet meeting, file a formal protest with China, and send his defense secretary and armed forces chief to the Western Command in a show of strength.

The March 2011 incident is considered a turning point for the Aquino administration. The president hardened his stance on sovereignty rights, sought closer ties with Washington and has quickened efforts to modernize its military.

A year later, Forum Energy is planning to return. Top company executives told Reuters the company intends to sail to Reed Bank within months to drill the area's first well for oil and natural gas in decades, an event that could spark a military crisis for Aquino if China responds more aggressively.

The U.S. military has also signalled its return to the area, with war games scheduled in March with the Philippine navy near Reed Bank that China is bound to view as provocative.
"This will be a litmus test of where China stands on the South China Sea issue," said Ian Storey, a fellow at the Singapore Institute of Southeast Asian Studies. "They could adopt the same tactics as they did last year and harass the drilling vessels, or they might even take a stronger line against them and send in warships."
A decades-old territorial squabble over the South China Sea is entering a new and more contentious chapter, as claimant nations search deeper into disputed waters for energy supplies while building up their navies and military alliances with other nations, particularly with the United States.

Reed Bank, claimed by both China and the Philippines, is just one of several possible flashpoints in the South China Sea that could force Washington to intervene in defense of its Southeast Asian allies.

OBAMA PIVOT
President Barack Obama has sought to reassure regional allies that Washington would serve as a counterbalance to a newly assertive China, part of his campaign to "pivot" U.S. foreign policy more intensely on Asia after a decade of war in Iraq and Afghanistan.
Obama brought up the South China Sea at an Asia-Pacific summit in Bali last November, and had a surprise one-one-one with Chinese Premier Wen Jiabao on the subject, although Beijing had insisted the issue should not be on the agenda at all.
"As Southeast Asian nations run to the U.S. for assistance, Beijing increasingly fears that America aims to encircle China militarily and diplomatically," said Stephanie Kleine-Ahlbrandt, Northeast Asia Director for the International Crisis Group. "Underlying all of these concerns is the potential that discoveries of oil and natural gas beneath the disputed sections of the South China Sea could fuel conflict."
The area is thought to hold vast untapped reserves of oil and natural gas that could potentially place China, the Philippines, Vietnam and other claimant nations alongside the likes of Saudi Arabia, Russia and Qatar.

Manila is beefing up its tiny and outdated naval fleet and military bases, adding at least two Hamilton-class cutters this year and earmarking millions of dollars to expand its Ulugan Bay naval base in Palawan.

It's no match for China's fleet, the largest in Asia, which boasts 62 submarines, 13 destroyers and 65 frigates, according to the International Institute for Strategic Studies.

China last month launched the fourth of its new 071 amphibious landing ships that are designed to quickly insert troops to trouble spots, disputed islands, for example.

The U.S. Navy has announced it will deploy its own new amphibious assault vessels, the Littoral Combat Ships, to the "maritime crossroads" of the Asia-Pacific theater, stationing them in Singapore and perhaps the Philippines.
Washington's renewed presence in the Philippines, a former U.S. colony that voted to remove American naval and air bases 20 years ago, follows the U.S. announcement last year of plans to set up a Marine base in northern Australia and possibly station warships in Singapore.

Manila is talking about giving Washington more access to its ports and airfields to re-fuel and service U.S. warships and planes. The two countries will conduct war games off Palawan island in late March -- focusing on how to deal with a takeover of an oil rig in the South China Sea.

'SOUNDS OF CANNONS'

China has warned oil companies not to explore in the disputed South China Sea, over which Beijing says it has "indisputable sovereignty." Chinese ships have repeatedly harassed vessels that have tried.

After ExxonMobil discovered hydrocarbons off the coast of Danang in central Vietnam, an area also claimed by China, one of China's most popular newspapers warned in October that nations involved in territorial disputes should "mentally prepare for the sounds of cannons" if they remain at loggerheads with Beijing.

Despite the threats, the Philippines and Vietnam have continued to explore for oil and natural gas further offshore in the South China waters, driven by persistently high oil prices and more advanced deep-sea technology.
The Philippines has reported as many as 12 incidents of Chinese vessels intruding into its sovereign waters in the past year, an unusually high number, Sabban said.
In one of the most serious incidents last October, a Philippine navy ship seized Chinese fishing boats after colliding with one of them, prompting protests from China for their return.
At least 12 Chinese fishermen have been arrested over the past year. Half of them remain in detention in Palawan.

"China has no right to tell us that we should first ask for permission from them to explore the area," Sabban said. "We have explored that area back in the 1970s, so why can't we explore it now? We knew that there is a substantial deposit of natural gas even before all of these things started."

Manila says Reed Bank, about 80 nautical miles west of Palawan island at the southwestern end of the Philippine archipelago, is within the country's 200-nautical mile exclusive economic zone. Beijing, however, believes it is part of the Spratlys, a group of 250 uninhabitable islets spread over 165,000 square miles, claimed entirely by China, Taiwan and Vietnam and in part by Malaysia, Brunei and the Philippines.
While China prefers to solve the disputes one-on-one with its smaller Southeast Asian neighbor, Washington has sought to internationalize the issue, given that half the world's merchant fleet tonnage sails across the sea and around these islets each year, carrying $5 trillion worth of trade.
"If we don't develop our positions in our exclusive economic zone, then we will only be giving it away and will be at the losing end," Eugenio Bito-Onon, the mayor of Kalayaan islands in the Spratlys, told Reuters at a coffee shop in Puerto Princesa.

China's oil exploration has been limited in the South China Sea with less than 15 deep sea wells drilled so far. Chinese offshore oil and gas specialist CNOOC Ltd, along with international partners Canada's Husky Energy and U.S. company Chevron Corp., plan to step up exploration in the area but focus mainly in the north, staying away from the politically sensitive waters to the south.

Estimates for proven and undiscovered oil reserves in the South China Sea range from 28 billion to as high as 213 billion barrels of oil, the U.S. Energy Information Administration said in a March 2008 report. That would be equivalent to more than 60 years of current Chinese demand, under the most optimistic outlook, and surpass every country's proven oil reserves except Saudi Arabia and Venezuela, according to the BP Statistical Review.
OIL MANDATE
General Sabban said the necessary patrol ships and surveillance planes will be provided to protect Forum Energy's exploration vessels in Reed Bank.
"We have a mandate to protect all oil companies exploring in our territory," he said. "We don't exactly escort them, but we are in the area to deter any outside force from harassing them."
Forum Energy, whose majority shareholder is the Philippines' top miner Philex Mining Corp., plans to spend around $80 million through 2013 to explore the Sampaguita gas field in Reed Bank, covered by Service Contract 72.
The field is estimated to hold at least 3.4 trillion cubic feet of natural gas, with the potential for five times that amount. That is at least 25 percent bigger than the nearby Malampaya gas field, operated by Royal Dutch Shell, which fuels half of the power needs for the country's main island of Luzon.
The Philippines is eager to further increase its natural gas production to meet growing domestic demand for gas-fired power, which is estimated to surge to 5,000 megawatts per day in 2016, from the current 2,700 megawatts.

"There is no question that there is gas there. We already know one or two locations we would like to drill on," said Apostol, Forum Energy's president, in an interview. "If the first drill is a bonanza, there might be a need to drill back to back."

The company said it is closely coordinating its Reed Bank plans with the military and the energy department, hoping to send drill ships by the fourth quarter.

"We are aware of the implementation risks that have to be taken into account when we contract the drilling services," said Forum Energy's executive director Carlo Pablo. "We have to have plans in case of delays in operations, on mitigating cost overruns, and contractual penalties that may be imposed."
A flotilla of ships could soon follow Forum Energy in disputed waters, with Manila later this year awarding two offshore oil and gas exploration contracts in territory also claimed by China.
That could well keep the phones busy for Sabban and his sailors at Western Command for some time to come.

(Reporting by Randy Fabi in Puerto Princesa and Manuel Mogato in Manila; Editing by Bill Tarrant)

WikiLeaks to publish security think tank emails

LONDON (Reuters) - The anti-secrecy group WikiLeaks said it would begin publishing more than five million emails Monday from a US-based global security think tank, apparently obtained by hackers.

In its latest high-profile disclosure, WikiLeaks said in a statement it had acquired access to a vast haul of internal and external correspondence of Strategic Forecasting Inc (Stratfor), based in Austin Texas.

Stratfor describes itself as a subscription-based provider of geopolitical analysis with an intelligence-based approach to gathering information.
WikiLeaks' founder, Julian Assange told Reuters: "Here we have a private intelligence firm, relying on informants from the US government, foreign intelligence agencies with questionable reputations, and journalists."
"What is of grave concern is that the targets of this scrutiny are, among others, activist organizations fighting for a just cause."
Stratfor's chief executive officer and founder, George Friedman warned on January 11 that emails had been stolen but said the thieves would be hard pressed to find anything significant.
"God knows what a hundred employees writing endless emails might say that is embarrassing, stupid or subject to misinterpretation... As they search our emails for signs of a vast conspiracy, they will be disappointed."
The source of the emails was not disclosed, but the publication follows the hacking of the company's computer servers last December by individuals claiming to be linked to the Anonymous cyber-activist group.
After Stratfor's computers were hacked into at least twice last December, the credit card details of more than 30,000 subscribers to Stratfor publications were posted on the Internet, including those of former US secretary of state Kissinger and vice president Dan Quayle.
An FBI investigation is already underway into the hack last December. Friedman said his staff were cooperating with the FBI in the investigation.
"Of course we have relationships with people in the U.S. and other governments and obviously we know people in corporations, and that will be discovered in the emails. But that's our job.
"We are what we said we were: an organization that generates its revenues through geopolitical analysis. At the core of our business, we objectively acquire, organize, analyze and distribute information."
WikiLeaks released secret video footage and thousands of U.S. diplomatic cables about the wars in Iraq and Afghanistan in 2010, infuriating the U.S. government.
Australian-born Assange, 40, is currently under house arrest in Britian and fighting extradition to Sweden for questioning over alleged sex crimes.
(Reporting by Stephen Grey; editing by Philippa Fletcher)

Thousands protest in Malaysia over rare earths plant

Thousands rallied Sunday in Malaysia in the biggest protest yet against an Australian miner's rare earths plant, as the opposition vowed to shut down the facility if it came to power.

Australia's Lynas has almost completed building the plant near the seaside town of Kuantan in eastern Pahang state to process rare earth ores imported from Australia.
China currently supplies about 95 percent of the world's demand for rare earths, which are used in high-tech equipment from iPods to missiles and have seen prices soar in recent years.

Lynas hopes to begin operations within months, producing an initial 11,000 tonnes of rare earths a year and effectively breaking the Chinese stranglehold on the materials.
But more than 5,000 people, many wearing green and holding banners reading "Stop pollution, stop corruption, stop Lynas," gathered in Kuantan to call for the plant to shut down.
They fear that radioactive waste it produces can seep into the ground and water, harming the environment and people's health.
Lynas has insisted the plant is safe, and any radioactive waste it produces will only be low-level and not harmful to human health.
But opposition leader Anwar Ibrahim, who attended the rally, told protesters his coalition, which currently holds more than a third of parliament, would cancel the plant if it came to power in the next polls expected soon.
"We don't want (this project) to sacrifice our culture and the safety of the children just because of a few corrupted leaders," he was quoted by online news portal Malaysiakini as saying.
His aide confirmed the comments.
Wong Teck, chairman of Himpunan Hijau 2.0, or Green Gathering, a coalition of NGOs that organised the rally, vowed more protests would follow if the government did not shut the plant immediately.
"From the rally today it is clear: We want Lynas out of here," he told AFP. "We are going to go all out all over the country. It is not going to stop here."
Police often intervene at rallies in Malaysia but did not do so on this occasion, although they were on standby.
Lynas' website was also hacked with a Malaysian flag and the slogan "Stop Lynas, Save Malaysia" replacing the usual site.
A Lynas representative could not immediately be reached for reaction. A Lynas advertorial in the New Straits Times daily Sunday said the company met "rigorous health, safety and environmental regulations."
Lynas is receiving a 10-year tax break for the plant, and has said having it in Malaysia offers better economics than Australia.
The government has said it is monitoring the plant closely to ensure its safety. Prime Minister Najib Razak was quoted by The Star daily as saying the plant is scientifically save, accusing the opposition of playing up the issue.
On Tuesday the Kuala Lumpur high court will start hearing an activist challenge to block the plant.
Opponents point to a similar rare earths plant in Malaysia's northern Perak state which was forced to shut down in 1992 over protests from residents who blamed it for birth defects in nearby populations.

Apple, Google, Amazon, smartphone makers sign privacy accord

SAN FRANCISCO (Reuters) - Six of the world's top consumer technology firms have agreed to provide greater privacy disclosures before users download applications in order to protect the personal data of millions of consumers, California's attorney general said on Wednesday.

The agreement binds Amazon, Apple, Google, Microsoft, Research In Motion, and Hewlett-Packard -- and developers on their platforms -- to disclose how they use private data before an app may be downloaded, Attorney General Kamala D. Harris said.

"Your personal privacy should not be the cost of using mobile apps, but all too often it is," said Harris.

Currently 22 of the 30 most downloaded apps do not have privacy notices, said Harris. Some downloaded apps also download a consumer's contact book.

Google said in a statement that under the California agreement, Android users will have "even more ways to make informed decisions when it comes to their privacy."

Apple confirmed the agreement but did not elaborate.

Harris was also among U.S. state lawmakers who on Wednesday signed a letter to Google CEO Larry Page to express "serious concerns" over the web giant's recent decision to consolidate its privacy policy.

The policy change would give Google access to user information across its products, such as GMail and Google Plus, without the proper ability for consumers to opt out, said the 36 U.S. attorneys general in their letter.
EU authorities have asked Google to halt the policy change until regulators can investigate the matter.
CAN AND WILL SUE

California's 2004 Online Privacy Protection Act requires privacy disclosures, but Harris said few mobile developers had paid attention to the law in recent years because of confusion over whether it applied to mobile apps.

"Most mobile apps make no effort to inform users about how personal information is used," Harris said at a press conference in San Francisco. "The consumer should be informed of what they are giving up."
The six companies will meet the attorney general in six months to assess compliance among their developers. But Harris acknowledged "there is no clear timeline" to begin enforcement.
The attorney general repeatedly raised the possibility of litigation at some future time under California's unfair competition and false advertising laws if developers continue to publish apps without privacy notices.
"We can sue and we will sue," she said, adding that she hoped the industry would act "in good faith."
There are nearly 600,000 applications for sale in the Apple App Store and 400,000 for sale in Google's Android Market, and consumers have downloaded more than 35 billion, said Harris.

There are also more than 50,000 individual developers who have created the mobile apps currently available for download on the leading platforms, she said.

These figures are expected to grow. She said an estimated 98 billion mobile applications will be downloaded by 2015, and the $6.8 billion market for mobile applications is expected to grow to $25 billion within four years.

(Reporting By Gerry Shih; Editing by Carol Bishopric and Michael Perry)

Alibaba.com shares surge on parent plans to privatize

HONG KONG (Reuters) - Alibaba.com Ltd shares rose more than 40 percent to a seven-month high on Wednesday after they resumed trading following an announcement that its parent Alibaba Group will take it private for about $2.5 billion at its IPO price.

Alibaba.com opened at HK$13.18, compared with its IPO price of HK$13.50 and sharply higher than its last closing price of HK$9.25 on February 8.

The opening share price is the highest intraday level since mid-July last year.

Jack Ma's Chinese e-commerce firm Alibaba Group said on Tuesday that it planned to take the Hong Kong-listed unit private, stressing the move was unrelated to any possible deal to buy back shares owned by Yahoo Inc.

Alibaba Group is offering investors HK$13.50 in cash per share, the same price as at the company's IPO in 2007.

FCC plans to nix wireless network that may jam GPS

NEW YORK (AP) — Federal officials plan to kill a proposal to build a new national high-speed wireless network after concluding it would in some cases jam personal-navigation and other GPS devices.

The Federal Communications Commission sought comments Wednesday on revoking LightSquared's permit after a federal agency that coordinates wireless signals, the National Telecommunications and Information Administration, concluded that there's no way to eliminate the risk of interference with GPS devices.

The FCC had seen LightSquared's proposal as a way to make more airwaves available to feed consumers' appetites for movies, music and games on a variety of mobile devices.
Makers of GPS devices and those who rely on them feared that GPS signals would suffer the way a radio station can get drowned out by a stronger broadcast in a nearby channel. The problem is that sensitive GPS receivers, designed to pick up relatively weak signals from space, could be overwhelmed by high-power signals from as many as 40,000 LightSquared transmitters on the ground. LightSquared planned to transmit on a frequency adjacent to that used by GPS.
When the FCC gave LightSquared tentative approval last year to build the network, it said the company wouldn't be allowed to start operations until the government was satisfied that any problems are addressed. LightSquared and the FCC had insisted the new network could co-exist with GPS systems.
After government and industry groups conducted tests, the NTIA said Tuesday that it found interference with dozens of personal-navigation devices and aircraft-control systems that rely on GPS.
The agency said that new technology in the future might mitigate the problems, but it would take time and money to replace GPS equipment already used extensively in the U.S. The NTIA, a branch of the Commerce Department, also said adjustments to LightSquared's network could cost billions of dollars and might not solve all of the problems.
LightSquared, which is based in Reston, Va., chastised the FCC for withdrawing approval after the company had already spent nearly $4 billion.
"There can be no more devastating blow to private industry and confidence in the consistency of the FCC's decision-making process," Sanjiv Ahuja, chairman and CEO of LightSquared, said in a statement.
Ahuja said the company still believed it could find a working solution "if all the parties have that same level of commitment."
The FCC said it was accepting public comments on its revocation plans until March 1.
LightSquared had hoped to compete nationally with super-fast, fourth-generation wireless services being rolled out by AT&T, Verizon Wireless and other traditional wireless companies. It hadn't planned to sell directly to consumers. Rather, it would have provided network access to companies including Leap Wireless, parent of the Cricket phone service, and Best Buy, which planned to rebrand the service under its own name.
LightSquared is owned by Harbinger Capital Partners, a private-equity firm that made billions betting against subprime mortgages ahead of the collapse of the housing market.
Part of the problem stems from the fact that today's GPS devices have been designed to screen out low-power signals in the adjacent wireless spectrum used by LIghtSquared, not the high-power ones planned.
Public Knowledge, a group that advocates more wireless competition, said the FCC needs to improve GPS-receiver standards so that the LightSquared spectrum can be used to meet growing demand for wireless services.
In a research note, telecom analyst Christopher C. King of Stifel Nicolaus said the move should benefit traditional wireless companies such as AT&T and Verizon as well as two other companies whose spectrum holdings may become more valuable: Dish Network Corp. and Clearwire Corp.
Dish's stock gained 69 cents, or 2.4 percent, to close Wednesday at $29.05. Clearwire gained 7 cents, or 3 percent, to $2.36. AT&T Inc. fell 20 cents to $29.87 while Verizon Communications Inc. lost 21 cents to $37.83 per share.