Today: After human-rights group attacks working conditions at Chinese factory, investors focus on confirmation of Apple's (AAPL) cheaper iPhone. Also: Tesla hits new all-time highs after BMW introduces electric challenger, Facebook gets close to IPO price.

The Lead: Apple stock gains after human rights group confirms cheaper iPhone

Apple stock climbed despite overall declines Monday on Wall Street, as a report outlining mistreatment of employees at a factory working on Apple products confirmed that the Cupertino tech giant is working on a cheaper iPhone that could help boost its sagging market share.

China Labor Watch reported a Pegatron factory in Shanghai committed dozens of labor-rights violations while the group had undercover workers in the facility, including unpaid overtime, underage workers and discrimination against certain ethnic groups. Apple responded immediately after The Wall Street Journal broke the news Sunday night, releasing a statement that said Apple had already dealt with one of the violations it was told about previously and would look into other issues.

"We will investigate these new claims thoroughly, ensure that corrective actions are taken where needed and report any violations of our code of conduct. We will not tolerate deviations from our code," Apple's statement read.


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Investors seemed to focus on the fact that the undercover workers were putting together an iPhone with a plastic case, instead of the metal body Apple uses for its current smartphones. Analysts and investors have been clamoring for Apple to release a lower-priced iPhone to help its market share in countries such as China, and the group's revelation seemed to validate earlier reports that Apple was planning plastic iPhones in multiple colors for a possible fall release.

While allegations of labor-rights violations could hurt Apple, they are nothing new: The New York Times ran a series of stories called "The iEconomy" that at times focused on Apple's Asian supplier's practices, winning a Pulitzer Prize in the process; and Apple has been open about their attempts to clean up the practices, joining the Fair Labor Alliance last year and responding quickly to issues on that front. Investors seemed unfazed by another allegation, as they have learned it does little to affect Apple's bottom line.

"Consumers will get to vote with their wallets if it's that much of a concern, but they're not necessarily voting with their wallets right now," BGC Partners analyst Colin Gillis succinctly summarized the prevailing view to Bloomberg News.

Apple shares gained 1.5 percent to $447.79 as the main Wall Street indexes declined, despite other news surrounding the company not leaning to the positive. Bob Mansfield left Apple's executive team to join CEO Tim Cook's "Special projects" team, costing Apple a leader who helped develop devices like the MacBook Air laptop. The company also is less than a week away from a deadline for President Barack Obama's administration to rescind a U.S. import ban on certain models of Apple devices in a patent fight with Samsung. Apple recently gained the support in that fight from BSA, a lobbying organization that is backed most prominently by Microsoft, Intel (INTC) and Oracle (ORCL).

SV150 market report: Tesla, Facebook hit new highs as SV150 gains slightly

While the three main Wall Street indexes declined Monday at the beginning of a busy week, the SV150 index of Silicon Valley's largest technology companies managed a gain thanks to Apple's strong showing and new high prices established by Tesla and Facebook.

Tesla reached all-time intraday and closing highs Monday, rising as high as $135.37 before closing with a 4 percent gain at $134.62 as the Palo Alto electric-car maker looks to break into the Chinese market. Storied German car manufacturer BMW seemed to validate Tesla's all-electric ambitions Monday with the introduction of an all-electric competitor, though one with a much smaller range than Tesla's Model S.

Facebook again hit new 52-week high, reaching prices only seen immediately following its initial public offering and closing in on the $38 shares commanded in that record-breaking affair. Facebook stock moved as high as $35.63 Monday before closing with a 4.2 percent bump at $35.43, still riding momentum created in its earnings report last week, which showed mobile improvement many see as a blueprint for other companies.

Those strong gains helped offset slighter losses from some of Silicon Valley's other big tech names. Google (GOOG) dropped 0.4 percent to $882.27 after relaunching stand-alone Zagat apps with no subscription fees for nine cities, including San Francisco; Yahoo (YHOO) 0.6 percent to $27.93 amid reports of yet another planned acquisition; and Hewlett-Packard (HPQ) dropped 1.2 percent to $25.67. A trio of SV150 earnings report did little to help, with PMC Sierra falling 8 percent in after-hours trading after posting results that deteriorated from the year-ago quarter, and DSP Group declining 4.7 percent to $7.78 after the SJ chip company reported earnings results in the morning. San Francisco's Advent Software experienced slight gains in late trading after announcing record revenues but an overall loss because of a special dividend.

Up: Facebook, Tesla, Apple, SunPower (SPWRA), VMware, SolarCity, Zynga, Salesforce

Down: LinkedIn, Advanced Micro Devices, Electronic Arts (ERTS), Pandora, HP, NetApp, eBay (EBAY), Adobe (ADBE), Gilead, Symantec, Applied Materials, Cisco (CSCO), Yahoo, Intuit (INTU), Netflix (NFLX), Google

The SV150 index of Silicon Valley's largest tech companies: Up 0.77, or 0.06 percent, to 1276

The tech-heavy Nasdaq composite index: Down 14.02, or 0.39 percent, to 3,599.14

The blue chip Dow Jones industrial average: Down 36.86, or 0.24 percent, to 15,521.97

And the widely watched Standard & Poor's 500 index: Down 6.32, or 0.37 percent, to 1,685.33

Check in weekday afternoons for the 60-Second Business Break, a summary of news from Mercury News staff writers, The Associated Press, Bloomberg News and other wire services. Contact Jeremy C. Owens at 408-920-5876; follow him at Twitter.com/mercbizbreak.