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Obama Drops Tough Plan on Bank Compensation

(The Wall Street Journal)The Obama administration is dropping its plan to cap salaries at firms receiving government bailout money, leaving them subject to congressionally imposed limits on bonuses, according to people familiar with the matter.

The move is likely to end months of confusion on Wall Street about separate pay directives from the White House and Congress.

The administration is expected to announce the compromise on Wednesday. In addition to standing behind the restrictions passed by Congress in February, the administration plans to push for broad changes in compensation practices across the financial-services industry, these people say.

It also will appoint a "pay czar" to monitor the firms receiving the most government aid. Treasury Secretary Timothy Geithner is expected to push all firms -- not just those receiving funds from the government's Troubled Asset Relief Program -- to more closely tie incentive compensation to long-term performance by paying employees in restricted stock, rather than cash.

The expected announcement will come one day after the Treasury Department told 10 of the largest U.S. financial institutions that they may repay $68 billion in government-bailout cash. The announcement set the stage for giant banks like J.P. Morgan Chase & Co., securities firms Goldman Sachs Group Inc. and Morgan Stanley and the other approved companies to escape the grip of tight restrictions.

The pay provisions were a key motivator for some banks to repay the TARP money. The most restrictive portions of Congress's rules targeted senior executives and top earners at firms receiving more than $500 million in government funds, limiting bonuses to no more than a third of total annual compensation.(continue)

U.S. Envoy: No Intention to Invade North Korea

NEW YORK(foxnews) -- President Obama's special envoy on North Korea says the U.S. has no intention to invade the communist country or change its regime by force.

Stephen Bosworth told the Korea Society Tuesday night that this has been repeatedly made clear to North Korea. The envoy says North Korea's claim to be responding to a threat or hostile policy by the U.S. is "simply groundless."

Bosworth says "negotiations and dialogue are the best means to achieve the goal of complete and verifiable denuclearization of the Korean Peninsula."

North Korea said Tuesday it would use nuclear weapons in a "merciless offensive" if provoked -- its latest rhetoric apparently aimed at deterring any international punishment for its recent atomic test blast.

South Korea has informed the U.S. of up to 20 North Korean bank accounts suspected of being involved in counterfeiting, money laundering and other illegal transactions, a news report said Wednesday.

The move came as Washington considered punishing the North with its own financial sanctions apart from proposed U.N. sanctions. Seven key nations neared agreement on a new U.N. resolution that would toughen sanctions against North Korea for defying the Security Council and conducting a second nuclear test.

South Korea gave the U.S. the information on some 10 to 20 North Korean bank accounts in China and Switzerland at Washington's request, South Korea's Chosun Ilbo newspaper reported, citing an unidentified government official.

Separately, South Korea's Finance Ministry has imposed sanctions on three North Korean companies for helping the country's April 5 long-range rocket test. The move was largely symbolic because the firms don't do business with South Korea.

The North has long been accused of being involved in the counterfeiting of US$100 bills and money laundering -- accusations Pyongyang has denied.

In 2005, the U.S. imposed financial restrictions Banco Delta Asia, a bank in the Chinese territory of Macau, over allegations of money laundering and other financial crimes involving North Korea. The move effectively cut the North off from the global financial system.

South Korea's chief nuclear envoy Wi Sung-lac said Tuesday that the Security Council is expected to adopt a resolution on North Korea within a couple of days, the South's Yonhap news agency reported.

Wi arrived late Tuesday in Beijing for talks with top Chinese officials on the North's nuclear stance, noting China's "special relationship" with Pyongyang.

Apple's Jobs ready to return from leave: report


SAN FRANCISCO (Reuters) - Apple Inc CEO Steve Jobs is on track to return to the company from his medical leave of absence as planned, the Wall Street Journal reported, citing a person who had seen Jobs in recent weeks.

The report that Jobs will return by the end of the month comes ahead of Apple's Worldwide Developer Conference in San Francisco on Monday, an event at which Jobs unveiled Apple's 3G iPhone a year ago but had not been expected to attend this time.

Jobs, 54, had said his medical leave would run until the end of June when he initially announced the move in January, setting the stage for a July return. Company representatives had said repeatedly he remained involved in strategic decisions and would return as scheduled.

Apple's spokesman did not return calls for comment.

Some analysts and investors feared that Jobs, a survivor of pancreatic cancer, might not return if his health problems did not improve.

Jobs was treated for a rare type of pancreatic cancer in 2004. He appeared gaunt at an Apple event last June and in January said he would take a leave of absence because his health problems were "more complex" than originally thought.

The Apple CEO's recovery "is coming along," the Journal reported.

The report also said two people who do business with Apple have been told by Apple managers that the company is trying to coordinate Jobs' return with a product launch or public event.

Jobs, a college dropout, co-founded Apple in 1976 in a Silicon Valley garage. After a falling-out with the board, he left the company in 1985.

Apple floundered, setting the scene for his return in 1997. The company has flourished under Jobs 2.0, rolling out the concept of a computer as a 'digital hub' along with the iPod and iPhone.

Nintendo rejected rivals' technology choice - FT

LONDON, June 5 (Reuters) - Nintendo Co Ltd (7974.OS) tried and rejected the motion-sensing technology that Sony Corp (6758.T) and Microsoft Corp (MSFT.O) are counting on to catch up in the video games wars, the company's president told the Financial Times.

Satoru Iwata told the newspaper in an interview his company had made experimental games controlled by camera-based sensors, but got better results with the accelerometers it chose to use for its Wii console.

The FT said Iwata's comments throw down the gauntlet to Nintendo's rivals, both of which announced motion controllers based on cameras this week in an effort to catch up with the Wii's runaway sales lead.

Financials, surging commodities lift Wall Street


By Ellis Mnyandu

NEW YORK (Reuters) - Stocks rose on Thursday as a brokerage's upbeat view on U.S. banks drove a run-up in financials, while soaring prices of oil and other commodities lifted natural resource companies on bets the economic slump is waning.

RBC Capital Markets upgraded the banking sector, saying it is poised for a multiyear bull market. The KBW bank index .BKX added 4.8 percent.

Crude oil prices surged and underpinned the broader market after Goldman Sachs raised its year-end oil price forecast to $85 a barrel, saying economic stabilization and tight supplies should bode well for prices.

U.S. crude settled up 4 percent at $68.81 a barrel on the New York Mercantile Exchange.

"The bigger gain in oil, not just today, is encouraging on the macro level. It's indicative of demand," said Cleveland Rueckert, market analyst at Birinyi Associates Inc, in Stamford, Connecticut.

Oil rose on Thursday as U.S. data showing a drop in jobless claims boosted expectations of an economic recovery that could revive energy demand. First-time jobless claims fell for a third straight week and the number of people remaining on the benefit rolls fell for the first time since the start of the year.

But Rueckert said he preferred for oil to hold around $60 barrel. "You don't want to have the same thing that happened last year when it ... becomes a burden to a lot of the consumers who are supposed to drive economic growth."

The Dow Jones industrial average .DJI gained 74.96 points, or 0.86 percent, to 8,750.24. The Standard & Poor's 500 Index .SPX climbed 10.70 points, or 1.15 percent, to 942.46. The Nasdaq Composite Index .IXIC rose 24.10 points, or 1.32 percent, to 1,850.02.

A broad run-up in commodities prices lifted shares of basic material companies, with aluminum producer Alcoa Inc (AA.N) up 6.2 percent at $10.69, while Newmont Mining (NEM.N) , the world's No. 2 gold producer, advanced 2.2 percent to $47.44.

The S&P materials index .GSPM gained 2.2 percent, while the gold BUGS index .HUI rose 3.3 percent.

Gold futures rose almost 2 percent on Thursday.

In the energy sector, Chevron Corp (CVX.N) shares ended up 2.2 percent to $69.72, while Exxon Mobil (XOM.N) added 1.3 percent to $72.98.

The S&P energy index .GSPE rose 2 percent.

Shares of Caterpillar Inc (CAT.N) , which sells bulldozers and excavators, shot up 3.7 percent to $38.02.

Among bank stocks, Bank of America (BAC.N) climbed 5.9 percent to $11.87 and Wells Fargo (WFC.N) shot up 4.0 percent to $25.10.

Shares of JPMorgan Chase (>JPM.N) rose 4.0 percent to $35.35, making it one of the Dow's top boosts. Citigroup raised its price target on JPMorgan's stock and said it saw the bank's commercial real estate losses as manageable.

Brokerages' views on the financial sector are of keen interest to investors, with the government still trying to resuscitate banks and lending to support an economic recovery.

Plane maker Boeing (BA.N) rose 4.6 percent to $50.57 after UAL Corp (UAUA.O), parent of United Airlines, asked Boeing and its European competitor EADS (EAD.PA) to bid on an order of up to 150 planes.

On the Nasdaq, Apple Inc (AAPL.O) shares rose 2 percent to $143.74 after Societe Generale started coverage of the technology bellwether with a "buy" rating.

While Thursday's economic reports generally supported expectations that the economy is starting to improve, disappointing May sales reported by major retailers showed that consumers are still holding onto their wallets.

Government data showed U.S. non-farm productivity rose by 1.6 percent in the first quarter, much stronger than initially estimated.

Investors are cautious about what Friday's report on U.S. employment might reveal as they look for more definitive signs that the recession that begun in December 2007 is easing. Since hitting a 12-year low on March 9, the S&P 500 has risen nearly 40 percent.

Volume was moderate on the New York Stock Exchange, where about 1.36 billion shares changed hands, below last year's estimated daily average of 1.49 billion. On the Nasdaq, about 2.50 billion shares were traded, above last year's daily average of 2.28 billion.

Advancers outnumbered decliners on the NYSE by a ratio of about 7 to 2, while on the Nasdaq, about five stocks rose for every 2 that fell.

Disney, Hearst, NBC in talks on cable joint venture

LOS ANGELES (Reuters) - The Walt Disney Co, Hearst Corp and NBC Universal are in talks to create a new corporate entity comprising the 10 cable channels the three companies own jointly, including A&E, Lifetime and History.

Representatives for both Disney Media Networks and Hearst confirmed the talks but declined to provide details. A spokesman for NBC Universal, the media wing of General Electric Co, was not immediately available to comment late in the day on Thursday.

"We can confirm that we are in conversation with our partners on the ownership structure," Disney Media Networks spokesman Kevin Brockman said. "No agreement has been reached and we have no announcement."

Hearst Corp spokesman Paul Luthringer had a similar statement.

Media trade publication Broadcasting & Cable reported on Wednesday that the three partners were close to a deal to create a joint venture that would hold the three popular cable channels, plus Lifetime Movie Networks, Lifetime Real Women, Biography Channel, History International, History on Espanol, Military History, and Crime and Investigation.

The new joint venture would be expected to eventually buy out NBC Universal and create economies of scale at the 10 channels that would lower costs, people familiar with the matter said.

Abbe Raven, president and CEO of A&E Television Networks, is expected to run the new venture, those sources said.

Obama in Egypt reaches out to Muslim world

(CNN) -- President Obama delivered his long-awaited and wide-ranging speech Thursday on American and Muslim relations, offering a hand of friendship to Islam and addressing an array of quandaries and conflicts dividing the two cultures.

At Egypt's Cairo University, Obama quoted from the Quran as he expounded on Islam's glories and rights, the legitimate rights of Israel and the Palestinians, Iranian nuclear aspirations, the wars in Iraq and Afghanistan, women's rights, economic development, and religious rights and democracy in the Muslim world.

The address, billed as a fence-mending mission between the United States and Islam, urged those present and the people across the globe viewing the speech on television to enter a new, productive and peaceful chapter in their relationship.

Obama's stop in Egypt is part of a trip that started in Saudi Arabia on Wednesday and will continue later to Germany and France. Watch Obama's entire speech »

"I know there are many -- Muslim and non-Muslim -- who question whether we can forge this new beginning," Obama said, emphasizing that "it is easier to start wars than to end them. It is easier to blame others than to look inward, to see what is different about someone than to find the things we share."

Obama reiterated a statement he made in Turkey in April.

"In Ankara, I made clear that America is not -- and never will be -- at war with Islam.

"We will, however, relentlessly confront violent extremists who pose a grave threat to our security -- because we reject the same thing that people of all faiths reject: the killing of innocent men, women and children. And it is my first duty as president to protect the American people."

Obama explored the Palestinian and Israeli conflict, endorsing a two-state solution and urging compromise and understanding between "two peoples with legitimate aspirations." iReport.com: A reaction to Obama's speech

And then he entered into the conflict's thickets, understanding claims from both sides. He said the United States "does not accept the legitimacy of continued Israeli settlements" seen by Muslims as impediments to Middle East peace. Watch as Obama seeks a "new beginning" »

"This construction violates previous agreements and undermines efforts to achieve peace. It is time for these settlements to stop."

Calling America's "strong bond" with Israel "unbreakable," he said, "It is based upon cultural and historical ties and the recognition that the aspiration for a Jewish homeland is rooted in a tragic history that cannot be denied."

He denounced the denial of the Holocaust and anti-Semitic stereotyping, and criticized anyone who would threaten Israel's destruction.

Expounding on the plight of Palestinians, Obama said "it is also undeniable that the Palestinian people -- Muslims and Christians -- have suffered in pursuit of a homeland."

"For more than 60 years they have endured the pain of dislocation. Many wait in refugee camps in the West Bank, Gaza and neighboring lands for a life of peace and security that they have never been able to lead," he said. Watch Obama discuss the Israeli-Palestinian conflict »

"They endure the daily humiliations -- large and small -- that come with occupation. So let there be no doubt: The situation for the Palestinian people is intolerable. America will not turn our backs on the legitimate Palestinian aspiration for dignity, opportunity and a state of their own."

Obama also denounced Palestinian violence and the rejection by some of Israeli existence -- both seen by Israel as obstacles to peace. The president conjured the lessons of America's civil rights movement when he urged Palestinians to "abandon violence."

"Resistance through violence and killing is wrong, and it does not succeed. For centuries, black people in America suffered the lash of the whip as slaves and the humiliation of segregation," he said. "It was not violence that won full and equal rights. It was a peaceful and determined insistence upon the ideals at the center of America's founding."

The conflict, Obama said, needs to be seen from a larger perspective, not from the viewpoint of one side or another. And both sides must live up to the responsibilities of the moribund "road map" peace process, he said. Watch CNN's Christiane Amanpour on Obama's message of detente »

He added that the Hamas movement -- which controls Gaza -- and has some support among Palestinians must end violence and recognize past agreements. He also urged Arab states to no longer use the conflict to distract their peoples from other problems.

"The only resolution is for the aspirations of both sides to be met through two states, where Israelis and Palestinians each live in peace and security," he said.

Obama talked about the importance of confronting violent extremism, touching on the fight against the Taliban and al Qaeda after the September 11, 2001, attacks on the United States.

Emphasizing the fact that the United States entered Afghanistan by "necessity" and not "choice," he countered the stances of some "who "question or justify the events of 9/11."
"But let us be clear: Al Qaeda killed nearly 3,000 people on that day. The victims were innocent men, women and children from America and many other nations who had done nothing to harm anybody. And yet al Qaeda chose to ruthlessly murder these people, claimed credit for the attack and even now states their determination to kill on a massive scale. They have affiliates in many countries and are trying to expand their reach. These are not opinions to be debated; these are facts to be dealt with," he said.

Obama said the United States does not seek to keep its troops in Afghanistan or establish military bases there but needs to continue the fight against "extremists," with both military power and investment in the infrastructure and economy of Pakistan and Afghanistan.

"It is agonizing for America to lose our young men and women. It is costly and politically difficult to continue this conflict. We would gladly bring every single one of our troops home if we could be confident that there were not violent extremists in Afghanistan and Pakistan determined to kill as many Americans as they possibly can. But that is not yet the case," he said.

He addressed the conflict in Iraq, calling it unlike Afghanistan "a war of choice that provoked strong differences in my country and around the world."

"Although I believe that the Iraqi people are ultimately better off without the tyranny of Saddam Hussein, I also believe that events in Iraq have reminded America of the need to use diplomacy and build international consensus to resolve our problems whenever possible," he said.

He said the United States needs to help Iraq "forge a better future and leave Iraq to Iraqis."
"I have made it clear to the Iraqi people that we pursue no bases, and no claim on their territory or resources. Iraq's sovereignty is its own. That is why I ordered the removal of our combat brigades by next August. That is why we will honor our agreement with Iraq's democratically elected government to remove combat troops from Iraqi cities by July, and to remove all our troops from Iraq by 2012."

Speaking about prohibiting torture and the closing of the Guantanamo Bay, Cuba, detention facility, Obama talked about working on "concrete actions to change course" and correct abuses in the war on terror.

"Just as America can never tolerate violence by extremists, we must never alter our principles. 9/11 was an enormous trauma to our country. The fear and anger that it provoked was understandable, but in some cases, it led us to act contrary to our traditions and our ideals," he said.

Obama dwelled on the tensions over nuclear weapons between the United States and Iran and the "tumultuous history" between the countries.

He pointed to the U.S. role in overthrowing a democratically elected government during the Cold War era and Iran's role in hostage-taking and violence against U.S. troops and civilians since the Islamic revolution in 1979.

The president reiterated his desire to move forward with Iran on many issues, saying the "question, now, is not what Iran is against, but rather what future it wants to build."
"But it is clear to all concerned that when it comes to nuclear weapons, we have reached a decisive point. This is not simply about America's interests. It is about preventing a nuclear arms race in the Middle East that could lead this region and the world down a hugely dangerous path."

The United States and other Western nations have opposed what they believe are Iran's intentions to develop nuclear weapons.

Obama said that any nation, including Iran, "should have the right to access peaceful nuclear power if it complies with its responsibilities under the nuclear Non-Proliferation Treaty." He said such a "commitment" is at the treaty's core and "it must be kept for all who fully abide by it."

"And I am hopeful that all countries in the region can share in this goal," Obama said.

Obama's speech draws mixed reviews in Middle East

JERUSALEM (CNN) -- Israelis and Palestinians had one thing in common Thursday: They hung on every word in President Obama's wide-ranging speech on U.S. and Muslim relations.

The main themes of the address resonated well with Palestinian and Israeli officials, while a Jewish settlers' group -- upset that Obama spoke against settlement activity -- found problems with the speech, and others, like a Hamas official, expressed mixed or negative views.

The government of Israel expressed "hope that this important speech in Cairo will indeed lead to a new period of reconciliation between the Arab and Muslim world and Israel."

"We share President Obama's hope that the American effort heralds the beginning of a new era that will bring about an end to the conflict and lead to Arab recognition of Israel as the homeland of the Jewish people, living in peace and security in the Middle East," it said.

"Israel is committed to peace and will make every effort to expand the circle of peace while protecting its interests, especially its national security." Watch all of Obama's speech »

Israeli President Shimon Peres welcomed the address, calling Obama's words wise and courageous and saying the president "called for hard work on the part of all the sides involved with the advance of the peace process in the Middle East."

"The concept of peace was born in the Middle East and constitutes the cornerstone of all three monotheistic faiths -- Christian, Jewish and Muslim -- and it is incumbent on the people of Abraham to unite to meet the challenge and together realize the vision of a sustainable peace in the Middle East," he said.

Chief Palestinian Negotiator Saeb Erakat applauded Obama's commitment to the creation of a two-state solution.

"This was a very important speech, in which President Obama reinforced the message that ending the occupation and establishing a viable and independent Palestinian state was in the mutual interest of Palestinians, Israelis and indeed the entire world. Progress towards peace hinges on both parties implementing their obligations under existing agreements," he said.

He said this means Palestinians must pursue progress "in the areas of governance, security and financial sector reforms" and Israel must adapt "an immediate and comprehensive settlement freeze" and lift restrictions on Palestinian movement.

Erakat also lauded Obama's description of the plight of Palestinians and the "need to address the daily injustices that Palestinians face. This includes the dislocation, dispossession and insecurity that millions of Palestinian refugees face, the intolerable realities of Israel's occupation, especially in Gaza, as well as the importance of Jerusalem to all faiths and peoples, including Palestinians, Christians and Muslims." Watch Obama call for a two-state solution, end of settlements »

For Nabil Abu Rudeineh, adviser of Palestinian President Mahmoud Abbas, the address was "very encouraging, and this is a new start and different American policy."

"This kind of change is very important for the whole region," he said, making note of Obama's call to stop the Jewish settlement activity.

Rudeineh made reference to Obama's remark that Jerusalem, which Israel has established as its capital, should be "a secure and lasting home" for Christians, Muslims and Jews.

"This is very important . This message should be understood by the Israelis," he said.

Responding to Obama's call for reinvigorating road map diplomacy, he said, "We think that this is the basis for a just and lasting peace in the region. If the Israelis are ready, we are committed to the road map and the Arab peace plan."

Obama lauded Islam's achievements and civilization. Ahmed Yousef, a Hamas official who is an adviser to the Foreign Ministry in Gaza, praised his words on the religion. "But where was the call for Palestinian right of return to lands lost when Israel was created or the continuing blockade on Gaza?" he asked.

Israeli settler leaders were predictably angered by Obama's call for an immediate end to settlement expansion. Making reference to Obama's Muslim middle name, the Yesha Council -- the settlers' group -- told Israeli media that "Hussein Obama gave priority to Arab lies."

In a West Jerusalem cafe, Israelis who watched the speech were heartened by Obama's reference to Holocaust denial as "baseless," "ignorant" and "hateful," saying Obama managed to hit a deep chord in the Jewish experience.

One Israeli, Melvin Lopotor, said the speech was "even-handed, and I think that he addressed the issues that I think are reflected in both people."

"What he said, he has already said before, and people know where he stands, but he kind of summarized it all in a very articulate way," he said.

Obama mentioned that he plans to visit the site of Buchenwald, a Nazi concentration camp, and Lopotor said Obama's understanding of historical anti-Semitic persecution and the Holocaust won points.

"He brought out a very important point that we Jews understand and feel strongly about, but the world -- particularly the Arab countries -- don't necessarily understand," Lopotor said. See international reaction to Obama's speech »

Ismail Muhamad, a Palestinian at the cafe, said the speech was balanced, promoting conciliation and a new way forward.

An Israeli, Roland Klein, said it's important to realize that the speech was a speech, and "not any kind of serious action."

"Everyone who heard it has to think about it, and this is important," he said. "But it needs to be said, and said aloud."

At a coffee shop in the West Bank city of Ramallah, a man named Tayeed couldn't accept Obama's interpretation and acceptance of the Jewish narrative of history in the region.

He "gave the Jews the right to establish their states on the back and suffering of the Palestinians and Muslims in general. And he also gave the right to the Palestinians on the account of the Jews." Watch Obama talk about how history shaped the present »

While Obama spoke about the plight of Palestinians at the "crossings and the settlements" in the West Bank, Tayeed said, he did not speak about the residents of Jerusalem.

The city has been annexed by Israel and made into its capital, but Palestinians and the world community do not recognize Jerusalem as Israel's capital and believe at least part of it to be occupied territory.

"The residents of Jerusalem," Tayeed said, "are living in the worst situation." Watch Al-Arabiya's Washington bureau chief respond to the speech »

Ahmad Salem was pleased Obama used the term "occupation" when he described Palestinian suffering.

"In general, he admitted that the Palestinians suffered from the Israeli occupation, focused on the settlements and that he is going to abolish the illegal settlements," he said.

Salem said that while Obama talked about Palestinian rockets hitting sleeping children, a reference to the cross-border attacks from Gaza into Israel, he didn't mention Israeli military incursions into the West Bank and its Gaza offensive.

"He could have just mentioned that 'I sympathize with them,' but ... he did not mention that thing at all," he said.
Abed Alsalam abu Askar said he was pleased that Obama mentioned his support for stopping settlement activity, which Askar said he believes is the main obstacle to peace.

"I know that Mr. Obama talked about the Israeli people suffering -- I do not know why they are suffering. I am very happy that he mentioned the suffering of the Palestinians, also."

Suspense builds ahead of Apple extravaganza


By Alexei Oreskovic

SAN FRANCISCO (Reuters) - Apple Inc kicks off its annual developers' extravaganza on Monday under a tight lid of secrecy, with investors expecting the electronics maker to unveil new or cheaper versions of its popular iPhone.

Thousands of customers, developers and investors are set to convene in San Francisco for Apple's Worldwide Developers' Conference, hoping to catch a glimpse of its latest high-tech wonders.

But while Apple made waves with its unveiling of the 3G iPhone at last year's event, this year's takes place against a more uncertain backdrop.

Steve Jobs, Apple's charismatic CEO and master showman, is still on medical leave and not due back until July. And the first credible challenger to Apple's iPhone, Palm Inc's new Pre smartphone, makes its grand debut on store shelves just two days before Apple's gala.

While many analysts believe Apple has a variety of new gadgets in the pipeline -- from new iPhone models to a long rumored, so-called tablet mini-PC -- the company has said the conference will focus on important but less sexy software operating system upgrades

Others on Wall Street believe the stage is set for a surprise product announcement.

Apple's shares have risen about 17 percent in the past two weeks, compared with a 5.7 percent gain in the Dow Jones Industrial Average during the same period.

"The consensus expectation is that they will also announce the next iteration of the iPhone," said Oppenheimer & Co analyst Yair Reiner.

A few Internet blogs have cited allegedly thin iPhone retail inventories as a tell-tale sign that Apple is clearing the decks to release a new model.

Speculation on a new iPhone has ranged from a model with a physical keyboard to handsets that boast more flash memory and faster processors.

WISH LIST

A less expensive, $99 iPhone is also on wish lists, as is the possibility of a model with a cheaper data plan or one sold through a carrier other than AT&T Inc, with which Apple has an exclusive distribution agreement.

Given the proximity to the launch of the Palm Pre smartphone on Saturday, some analysts reckon Apple will hold off on announcing any new iPhones.

"It gives you some time to study the Pre, see what the problems are and roll out a campaign against it," said Rob Enderle, principal analyst at the Enderle Group consulting firm.

Piper Jaffray analyst Gene Munster expects new iPhones to ship in July, regardless of whether or not Apple announces them at the conference or a later date, while he has forecast a 2010 release date for an Apple tablet PC.

Munster deemed a surprise appearance by Jobs at the show "unlikely," although he said in a recent note to investors he expects Jobs to be back by the end of the month.

According to Apple, the new iPhone 3.0 operating system unveiled at the conference will include 100 new features, including the ability to cut and paste text and improved search functionality. Apple has also said it will showcase its new Snow Leopard operating system for Mac computers.

With expectations so high, some analysts warn Apple's stock will be under pressure no matter what the company announces.

"We still like Apple's long term prospects, but believe at current prices, we could see some sell-off post-WWDC," BMO Capital Markets analyst Keith Bachman wrote in a recent investor note.

"Give it away, you'll enjoy it," Gates tells rich

OSLO (Reuters Life!) - Microsoft founder Bill Gates said on Wednesday that billionaires ought to give away most of their wealth to charitable causes, and they would even find they enjoyed it.

Gates has given much of his wealth from Microsoft, the U.S. software giant that made him the world's richest man, to the Bill & Melinda Gates Foundation, a philanthropic powerhouse.

"I think all billionaires should give away the vast majority of their fortunes -- though I don't say they shouldn't leave anything to their kids," Gates told a gathering at Oslo's opera house.

"I think they would enjoy it, their kids would be better off, and the world would be better off," Gates said

"I'm a great believer that great wealth should go from the richest to the poorest," he said, seated next to his wife Melinda who co-chairs the foundation.

Gates renewed his appeal to eradicate polio, saying the goal was well within reach, which would make it the second major communicable disease entirely wiped out after smallpox in the late 1970s.

"We have to get rid of polio because if we don't, it will spread back and we will have millions affected," he said.

Gates said his foundation's biggest success had been in the field of vaccination.

"Vaccination is the area where we have saved millions of lives, and there is more to be done."

Gates said it was a big disappointment that science had not produced a vaccine to prevent HIV/AIDS, but he said he was optimistic about some emerging prevention methods that could be used by women to stop infection before a vaccine is discovered.

Once one of those methods proved to work, he said, the foundation would work "to get it out there and dramatically decrease the number getting (the disease)."

"The holy grail for AIDS is to have a vaccine, which is something we are also working on," Melinda Gates said.

"It will probably be 10 to 15 years before we get that," Bill Gates said. - Reuters