Apple will try to defy skeptics at Monday showcase

SAN FRANCISCO — Apple has spent most of this year promising to defy the skeptics who believe the iPhone and iPad maker lost its ingenuity when Steve Jobs died in 2011.

This week should provide a better sense of whether Apple is heading down promising new avenues of growth or whether it's still wandering aimlessly around well-trod territory in search of another breakthrough.

If speculation pans out, Apple could use its annual developers conference in San Francisco as a showcase for its plans to help manage people's health, finances and homes. The five-day conference begins Monday.

Apple Inc. CEO Tim Cook declined to provide specifics about the agenda during an interview with The Associated Press last week about the company's $3 billion deal for headphone and music-streaming specialist Beats Electronics.

"We have some great things coming out this year, and I think people are going to be blown away," Cook said. "I am certainly blown away from playing with them."

Investors appear to be regaining faith in Apple's ability to innovate. The company's stock has climbed 13 percent so far this year to close Friday at $633. The Standard & Poor's 500 index has gained 4 percent during the same stretch.

The rally reflects a dramatic turnaround in sentiment. Apple financial growth has slowed amid tougher competition, and it has had a streak of ho-hum product updates. As a result, Apple's stock fell 45 percent to $385.10 in April 2013, from a peak of $705.07 in September 2012.

Some of the recent run-up may have been triggered by a planned 7-for-1 stock split that will make Apple's stock cheaper to buy. The ability for more investors to afford the stock and participate in the market could drive up the company's overall market value. The split, announced in April, is planned for June 9.

Monday's keynote is expected to focus on the software that runs Apple's mobile devices and Mac computers. Apple typically rolls out its latest gadgets at separate gatherings timed to the holiday shopping season. The developers conference is where the Cupertino, California, company provides the first glimpse of software updates coming to those gadgets.

Even without a new iPhone, iPad or even a long-rumored smartwatch likely to be unveiled this week, Apple could still draw interest by revealing its plans to immerse its services even deeper in people's lives.

The next version of Apple's mobile software, iOS, is widely expected to include a built-in health-management tool to help people track their vital signs, diet and sleeping habits. This tool could be similar to Passbook, a feature that Apple built into iOS two years ago to store tickets for flights and events, as well as digital gift certificates.

The new iOS also could include a long-awaited digital wallet that enables Apple to process payments on iPhones and iPads. Google Inc. has already tried something similar on its Android software for smartphones, but it hasn't gained much traction in digital payments.

Apple, though, already has built a powerful springboard into digital payments — 800 million iTunes accounts tied to credit cards. The iPhone also includes a location technology, called iBeacon, that conceivably could be tied into a digital wallet. Apple already has been working with various merchants to use iBeacon so they might be able to communicate with shoppers as they roam through the store. Mobile payments are believed to be high on the priority list of Angela Ahrendts, the former Burberry CEO who became the head of Apple's own stores in April.

Other speculation has centered on the possibility that Apple will unveil a home automation system that will enable iPhones and iPad to become a remote control for managing lighting, security and other household appliances with wireless connections.

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77,000 foreign banks to share tax info with IRS

WASHINGTON — More than 77,000 foreign banks have agreed to share information about U.S. account holders as part of a crackdown on offshore tax evasion, the Treasury Department said Monday.

The list includes 515 Russian financial institutions. Russian banks had to apply directly to the Internal Revenue Service because the U.S. broke off negotiations with Russia over an information-sharing agreement because of Russia's actions in Ukraine.

Nearly 70 countries have agreed to share information from their banks as part of a U.S. law that targets Americans hiding assets overseas. Participating countries include all the world's financial giants, as well as many places where Americans have traditionally hid assets, including Switzerland, the Cayman Islands and the Bahamas.

Under the law, foreign banks that don't agree to share information with the IRS face steep penalties when doing business in the U.S. The law requires American banks to withhold 30 percent of certain payments to foreign banks that don't participate in the program — a significant price for access to the world's largest economy.

The 2010 law is known as FATCA, which stands for the Foreign Account Tax Compliance Act. It was designed to encourage — some say force — foreign banks to share information about U.S. account holders with the IRS, making it more difficult for Americans to use overseas accounts to evade U.S. taxes.

"The strong international support for FATCA is clear, and this success will help us in our goal of stopping tax evasion and narrowing the tax gap," said Robert Stack, deputy assistant Treasury secretary for international tax affairs.

Under the law, U.S. banks that fail to withhold the tax would be liable for it themselves, a powerful incentive to comply. U.S. banks are scheduled to start withholding 30 percent of interest and dividend payments in July, though recent guidance from the Treasury Department gives them some leeway on timing.

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Follow Stephen Ohlemacher on Twitter: http://twitter.com/stephenatap

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Stocks slip after US manufacturing slows

NEW YORK — Stocks erased an early loss Monday after a trade group said U.S. manufacturing grew at a brisk pace last month, correcting its earlier statement that growth had slowed. Investors were caught off guard since changes to the report are very unusual.

KEEPING SCORE: The Dow Jones industrial average rose 16 points, or 0.1 percent, to 16,734 as of 12:55 p.m. Eastern. The Standard & Poor's 500 index was up a point to 1,924 and the Nasdaq composite lost six points, or 0.2 percent, to 4,236. The Dow and S&P 500 both closed at record highs on Friday.

ISM REVISIONS: The Institute for Supply management had to issue two corrections to its monthly manufacturing report, which investors keep a close eye on as an indicator of where the U.S. economy is heading. The ISM said the correct number for its manufacturing index was 55.4 in May, in line with what economists were expecting. That's a better result than the 53.2 figure reported initially.

MADE IN CHINA: There was also encouraging economic news out of Asia. A Chinese manufacturing index edged up to 50.8 in May from 50.4 in April. Asian stocks rose on the report. Japan's Nikkei increased 2.1 percent.

ANOTHER HEALTHCARE DEAL: The real-estate investment trust Ventas said it has reached a deal to buy American Realty Capital Healthcare Trust Inc. in a $2.6 billion cash-and-stock deal. The companies each own medical care offices along with other properties. A.R.C.'s stock rose 97 cents, or 10 percent, to $10.91 while Ventas fell $1.41, or 2 percent, to $65.39.

BROADCOM: Semiconductor maker Broadcom rose $2.65, or 8 percent, to $34.49. The company said it is exploring options for its cellular chip business, which could include selling the division or shutting it down.

BONDS PULL BACK: The yield on the 10-year Treasury note rose to 2.53 percent from 2.48 percent on Friday. Even with the modest increase, bond yields are still trading near their lows for the year.

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After record week, a quiet open for US stocks

NEW YORK — U.S. stock indexes are mixed in early trading as the market comes off its latest record high last week.

The Dow Jones industrial average edged up 22 points, or 0.1 percent, to 16,740 in the first few minutes of trading Monday.

The Standard & Poor's 500 index fell less than a point to 1,922. The Nasdaq composite fell nine points, or 0.2 percent, to 4,232.

Broadcom jumped 10 percent after saying it would seek a buyer for its division that makes chips used in cellular devices.

European markets rose slightly.

Bond prices fell. The yield on the 10-year Treasury note rose to 2.51 percent, up slightly from 2.48 percent late Friday but still near its low for the year.

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Massachusetts gas prices down a penny

BOSTON — The price of a gallon of gas in Massachusetts has inched down a penny in the past week.

AAA Southern New England reports Monday that self-serve, regular is now averaging $3.64 per gallon.

The current price is 4 cents lower than a month ago but 14 cents higher than a year ago.

The Massachusetts price is 3 cents per gallon lower than the national average.

AAA found self-serve, regular selling for as low as $3.53 per gallon and as high as $3.79.

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Court: Company didn't induce patent infringement

WASHINGTON — A unanimous Supreme Court ruled Monday that a company is not liable for inducing patent infringement if someone other than the company carries out some of the steps leading to infringement.

The justices unanimously ruled Monday that Internet content delivery company Limelight Networks Inc. did not infringe on the patented system for managing images and video owned by rival Akamai Technologies Inc.

Akamai claimed Limelight used some of its patented methods for speeding content delivery, and then illegally encouraged its customers to carry out the remaining steps. The U.S. Court of Appeals for the Federal Circuit agreed, but the Supreme Court reversed.

Justice Samuel Alito said all the steps for patent infringement must be performed by a single party. Since there was no direct infringement, Alito said there could be no inducement.

The case drew interest from tech giants including Google and Oracle, which have been sued frequently by so-called "patent trolls," companies that buy patents and force businesses to pay license fees or face costly litigation. They had urged the high court to overturn the Federal Circuit in order to limit the growing number of patent infringement lawsuits.

In another patent case Monday, the high court also ruled unanimously that a medical device company's patent on a heart-rate monitor used with exercise equipment was too ambiguous to pass muster. Biosig Instruments had sued competitor Nautilus Inc., for allegedly infringing its monitor's design.

Writing for the court, Justice Ruth Bader Ginsburg said the description of Biosig's design as a "spaced relationship" between two electrodes was not specific enough to meet patent standards. The high court again reversed a decision of the Federal Circuit, which found the patent acceptable.

The Supreme Court remanded the case and instructed the appeal court to use a more exacting standard.

The cases are Limelight Technologies, Inc. v. Akamai Technologies, Inc., 12-786; and Nautilus, Inc. v. Biosig Instruments, Inc., 13-369.

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Big power-plant pollution cuts are ordered

WASHINGTON — In a sweeping initiative to curb pollutants blamed for global warming, the Obama administration unveiled a plan Monday aimed at cutting carbon dioxide emissions from power plants by nearly a third over the next 15 years. But it sets the deadline for some states to begin complying until long after President Barack Obama leaves office.

The 645-page plan, expected to be finalized next year, is a centerpiece of Obama's efforts to deal with climate change and seeks to give the United States more leverage to prod other countries to act when negotiations on a new international treaty resume next year. Under the plan, carbon emissions are to be reduced 30 percent by 2030, compared to 2005 levels, in what would amount to one of the most significant U.S. actions on global warming.

The proposal sets off a complex regulatory process, steeped in politics, in which the 50 states will each determine how to meet customized targets set by the Environmental Protection Agency, then submit those plans for approval.

"This is not just about disappearing polar bears or melting ice caps," said EPA Administrator Gina McCarthy. "This is about protecting our health and our homes. This is about protecting local economies and jobs."

Some states will be allowed to emit more pollutants and others less, leading to an overall, nationwide reduction of 30 percent.

Many states that rely heavily on coal will be spared from cutting a full 30 percent. West Virginia, for example, must cut 23 percent by 2030 compared to what the state was emitting in 2012. Ohio's target is 28 percent, while Kentucky and Wyoming will have to find ways to make 18 percent and 19 percent cuts.

On the other extreme, New York has a 44 percent target, EPA figures show. But New York already has joined with other Northeast states to curb carbon dioxide from power plants, reducing the baseline figure from which cuts must be made. States like New York can get credit for actions they've already taken, lest they be punished for taking early action.

Initially, Obama wanted each state to submit its plan by June 2016. But the draft proposal shows states could have until 2017 — and 2018, if they join with other states.

That means even if the rules survive legal and other challenges, the dust won't likely settle on this transformation until well into the next administration, raising the possibility that political dynamics in either Congress or the White House could alter the rule's course.

Although Obama doesn't need a vote in Congress to approve his plans, lawmakers in both the House and Senate have already vowed to try to block them — including Democratic Rep. Nick Rahall, who faces a difficult re-election this year in coal-dependent West Virginia. Scuttling the rules could be easier if Republicans take the Senate in November and then the White House in 2016.

Another potential flash point: The plan relies heavily on governors agreeing to develop plans to meet the federal standard. If Republican governors refuse to go along, as was the case with Obama's expansion of Medicaid, the EPA can create its own plan for a state. But the specifics of how EPA could force a state to comply with that plan remain murky.

S. William Becker, who heads the National Association of Clean Air Agencies, said it was good that the rule will give states more time to develop strategies and will grant credit for previous steps to cut emissions.

"Still, the regulatory and resource challenges that lie ahead are daunting," Becker said.

Power plants are the largest U.S. source of greenhouse gases, accounting for about a third of the annual emissions. EPA data show power plants have already reduced carbon dioxide emissions by nearly 13 percent since 2005, meaning they are about halfway to meeting the administration's goal.

The EPA projected that carrying out the plan will cost up to $8.8 billion annually in 2030, but the actual costs will depend heavily on how states choose to reach their targets. The administration argued that any costs to comply are far outweighed by savings in health expenses that the U.S. will realize thanks to reductions in other pollutants such as soot and smog that will accompany a shift away from dirtier fuels.

Environmental groups hailed the proposal, praising both the climate effects and the public health benefits they said would follow. Former Vice President Al Gore, a prominent environmental advocate, called it "the most important step taken to combat the climate crisis in our country's history."

But energy advocates sounded alarms, warning of economic drag. Senate Minority Leader Mitch McConnell, R-Ky., called the proposal "a dagger in the heart of the American middle class."

"If these rules are allowed to go into effect, the administration for all intents and purposes is creating America's next energy crisis," said Mike Duncan of the American Coalition for Clean Coal Electricity, which represents the coal industry.

Options for states to meet the targets include making power plants more efficient, reducing the frequency at which coal-fired power plants supply power to the grid, and investing in more renewable, low-carbon sources of energy. States could also enhance programs aimed at reducing demand by making households and businesses more energy-efficient. Each of those categories will have a separate target.

Coal once supplied about half the nation's electricity, but has dropped to 40 percent amid a boom in natural gas and renewable sources such as wind and solar. Although the new emissions cuts will further diminish coal's role, the EPA predicted that it would remain a leading source of electricity in the U.S., providing more than 30 percent of the projected supply.

Obama has already tackled the emissions from the nation's cars and trucks, announcing rules to reduce carbon dioxide emissions by doubling fuel economy. That standard will reduce carbon dioxide by more than 2 billion tons over the lives of vehicles made in model years 2012-25.

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Reach Dina Cappiello at http://twitter.com/dinacappiello and Josh Lederman at http://twitter.com/joshledermanAP

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Justices reject reporter's bid to protect source

WASHINGTON — A reporter who has been ordered to testify at the trial of a former CIA officer accused of disclosing classified information lost his bid Monday to get the Supreme Court to clarify whether journalists have a right to protect their confidential sources.

The justices did not comment in rejecting an appeal from New York Times reporter James Risen, who detailed a botched CIA effort during the Clinton administration to thwart Iran's nuclear ambitions. Risen's reporting is at the center of criminal charges against former CIA officer Jeffrey Sterling. Federal prosecutors want to force Risen to testify about his sources at Sterling's trial.

Risen argued that he has a right to protect his sources' identity, either under the Constitution or rules governing criminal trials. The federal appeals court in Richmond, Virginia, rejected Risen's bid to avoid being forced to testify.

His Supreme Court appeal came amid a debate over where to draw the line between national security and press freedoms. The Obama administration has been more aggressive than its predecessors in pursuing leaks of government secrets, including reviewing journalists' phone and email records and seeking to compel reporters to testify.

At the same time federal prosecutors have fought Risen in court, Attorney General Eric Holder has suggested that the government would not seek to put Risen in jail should he refuse to testify as ordered.

Joel Kurtzberg, an attorney for Risen, said Monday that prosecutors must now decide whether they will force the issue.

"The ball is now in the government's court. It can elect to proceed in the Sterling trial without Jim's testimony if it wants to. If they insist on his testimony and Jim refuses to testify, the court will need to have a hearing to determine if Jim is in contempt and, if so, what the consequence of that will be," Kurtzberg said.

Disclosures of subpoenas for the records and testimony prompted Congress to revive a proposal for a national media shield law, similar to laws in place in most states, which would afford a measure of protection to reporters and news media organizations from being required to reveal the identities of confidential sources. But it would not grant an absolute privilege to journalists.

The last time the Supreme Court weighed in on reporters and confidential sources was in 1972, when the court held 5-4 that that nothing in the First Amendment protects reporters from being called to testify before grand juries.

The appeals court relied on that ruling in Branzburg v. Hayes to side with prosecutors against Risen.

Last year, a three-judge appellate panel ruled 2-1 that Risen could be ordered to testify because he "can provide the only first-hand account of the commission of a most serious crime indicted by the grand jury — the illegal disclosure of classified, national security information by one who was entrusted by our government to protect national security, but who is charged with having endangered it instead."

Earlier, a judge had said Risen could be questioned about the accuracy of his journalism but could not be forced to divulge any confidential sources.

Risen has refused to speak with government attorneys about his sources, and he didn't testify before the federal grand jury that indicted Sterling in 2010 on charges of unauthorized retention and communication of national defense information, unauthorized conveyance of government property, mail fraud and obstruction of justice.

The Associated Press and many other leading news organizations supported Risen's appeal.

The case is Risen v. U.S., 13-1009.

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Service for Philly paper owner set for Wednesday

PHILADELPHIA — A public memorial service for Philadelphia Inquirer co-owner Lewis Katz will be held Wednesday at Temple University in Philadelphia.

The 72-year-old Katz and six others died Saturday in a private plane crash near Boston.

Katz was a 1963 graduate of Temple, a school trustee and a major donor.

Platt Memorial Chapels in nearby Cherry Hill, New Jersey, is handling funeral arrangements for Katz and 67-year-old Susan Asbell of Cherry Hill, who was also killed in the crash. She was a friend of Katz and director of the Boys and Girls Club of Camden, one of Katz's many charitable endeavors.

The funeral home says the funerals won't be set until Massachusetts authorities release the bodies.

The service for Katz is scheduled for 11 a.m. Wednesday at the Temple Performing Arts Center.

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No cable cars in San Francisco; workers out sick

SAN FRANCISCO — San Francisco's famed cable cars were not running Monday morning and the rest of the city's transit system was experiencing rush-hour delays after workers called in sick, transportation officials said.

The San Francisco Municipal Transportation Agency was running a third of its normal morning service, spokesman Paul Rose said. The agency runs buses, light rail and street cars in addition to the cable cars.

Rose said he did not know how many of the agency's employees called in sick, but there were rumors over the weekend that a significant number of workers would not be coming in.

"We're doing our best to balance service throughout the city and provide service on every route and line, but at this point there will be delays," he said.

All express buses were running local service in the morning and stopping at every stop, the agency said. The Bay Area Rapid Transit Agency was honoring tickets on city transportation all day from the Daly City and Balboa Park stations to downtown San Francisco, Rose said.

The transit system's operators, who are represented by Transport Workers Union Local 250-A, voted Friday on a new contract that would give them a raise of more than 11 percent over two years. However, it also would require them to cover a 7.5 percent pension payment that is currently paid by the city's transit agency, the San Francisco Chronicle reported.

About 2,200 operators work for the agency. They are not allowed to go on strike but can call in sick.

San Francisco transit officials said the contract would increase operator pay to $32 an hour, making the operators the second highest paid transit workers in the country, according to the Chronicle.

Union President Eric Williams called the proposal unfair and said in a statement on the union's website that the city had proposed "unreasonable takeaways in wages and benefits."

Calls and emails to union officials on Monday morning were not immediately returned.

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