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An employee of German Apple retailer Gravis displays an iPhone 7 and 8 in a store in Berlin, Germany, January 3, 2019.

Fabrizio Bensch | Reuters

An employee of German Apple retailer Gravis displays an iPhone 7 and 8 in a store in Berlin, Germany, January 3, 2019.

Apple Inc said Thursday that it will resume selling older iPhone models in its stores in Germany after they were banned last year, but only with chips from Qualcomm Inc, which is in a global legal battle against the Cupertino company.

Apple said it had “no choice” but to stop using some chips from Intel Corp in iPhones headed to Germany in order to comply with a patent infringement lawsuit Qualcomm won against Apple there in December.

Qualcomm, the world’s biggest supplier of mobile chips, sued Apple in Germany alleging that some older iPhone 7 and iPhone 8 models violated Qualcomm patents around so-called envelope tracking, a feature that helps mobile phones save battery power while sending and receiving wireless signals. The alleged patent violation stemmed not from Intel chips but yet another Apple supplier – Qorvo Inc – whose chip was only present in older phones with Intel modems.

The court sided with Qualcomm and banned sales of some iPhone models that used Intel modem chips, leading Apple to pull the devices from its 15 retail stories in Germany and its online store in the country.

The ban was a victory in Qualcomm’s legal conflict with Apple.

The iPhone maker has alleged that Qualcomm engaged in illegal patent licensing practices to protect a monopoly on so-called modem chips, which connect mobile phones to wireless data networks. Qualcomm has in turn alleged that Apple has infringed its patents. A major case between the two goes to trial in the United States in April.

Apple began phasing in Intel’s modem chips in 2016 after years of using chips exclusively from Qualcomm. In last year’s iPhone models, Apple dropped Qualcomm’s chips completely in favor of Intel’s.

But Qualcomm has continued to supply Apple with chips for older models, and Apple on Thursday said it would use only those for German iPhone 7 and 8 models.

“Qualcomm is attempting to use injunctions against our products to try to get Apple to succumb to their extortionist demands,” Apple said in a statement to Reuters.

Newer iPhones with Intel chips remain on sale in Germany.

“Intel’s modem products are not involved in this lawsuit and are not subject to this or any other injunction,” Steven Rodgers, Intel’s general counsel, said in a statement.

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S&P 500 and Nasdaq rally to record closing highs

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The S&P 500 and Nasdaq Composite rallied on Tuesday to notch record closing highs as Wall Street cheered stronger-than-expected quarterly profits from some of the largest publicly traded U.S. companies.

The broad index closed 0.9% higher at 2,933.68, topping its previous record close of 2,930.75. The S&P 500 also ended the day just below its intraday record of 2,940.91. The Nasdaq closed up 1.3% at 8,120.82. The Dow Jones Industrial Average, meanwhile, gained 145.34 points to close at 26,656.39 and was 1.1% from an all-time high.

Tuesday’s move toward an all-time closing high comes less than six months after a sharp decline in late December, which led the S&P 500 to its worst annual performance since 2008. But stocks quickly turned around as the Federal Reserve reversed course on monetary policy while the tone around U.S.-China trade talks improved.

“These market levels are justified,” said Kevin Barry, chief investment officer at Captrust Advisors. “The fourth-quarter sell-off actually prevented a recession because policymakers responded extremely quickly. Both President Xi and President Trump cooled off the rhetoric and Fed Chairman Jerome Powell came out and reversed course.”

Dow members Coca-Cola and United Technologies reported better-than-expected quarterly earnings on Tuesday. Their shares rose 1.7% and 2.3%, respectively.

Twitter shares jumped 15.6% on its stronger-than-expected results. The social media company said its monthly active users totaled 330 million, more than a FactSet estimate of 318 million.

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Goldman Sachs rules out an oil price rally

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Iranian workers walk at a unit of South Pars Gas field in Asalouyeh Seaport, north of Persian Gulf, Iran November 19, 2015.

Raheb Homavandi | TIMA

Iranian workers walk at a unit of South Pars Gas field in Asalouyeh Seaport, north of Persian Gulf, Iran November 19, 2015.

Goldman Sachs expects the United States’ decision to end exemptions from sanctions for countries still buying oil from Iran to have a limited impact on crude prices, even though the timing is likely to have caught energy market participants by surprise.

“While we acknowledge the near-term upside price risks, we reiterate our fundamentally derived Brent price trading range of $70-75 per barrel for the second quarter of 2019,” the U.S. investment bank said in a research note published Monday, Reuters reported.

The world’s largest economy said Monday that from May 1, it would eliminate all waivers allowing eight economies to buy Iranian oil without facing U.S. sanctions.

These eight economies that were initially allowed to continue buying Iranian crude without facing penalties include: China, India, Japan, Turkey, Italy, Greece, South Korea and Taiwan.

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China says economic growth improving. Analysts warn stimulus is needed

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Robin Xing, chief China economist at Morgan Stanley, said the emphasis now will be on non-monetary measures.

“They didn’t mention that they’re going to end the policy easing,” Xing said Tuesday on CNBC’s “Street Signs” of the politburo gathering.

“They’re relying more and more on fiscal easing,” he said, referring to a 2 trillion yuan (298 billion) package announced last month at the National People’s Congress that includes cuts to taxes and fees.

“It’s locked in, they’re not going back on that, there’s no possibility of scaling back the fiscal package,” Xing said, adding Morgan Stanley is still “confident that the overall policy mix is still supportive.”

China’s massive debt levels, which authorities were trying to bring under control before the trade war kicked in last year, are a major worry for policymakers.

Economists Larry Hu and Irene Wu at Macquarie Capital said that officials have to tread carefully as they will need to keep some stimulus in reserve in case the economy worsens.

“It’s understandable that policy makers have to reduce the intensity of stimulus once the economy shows signs of stabilization, as the amount of ammunition is limited,” Hu and Wu said in a note dated Sunday.

Stimulus is set to wane, they said, “as policy makers have to save the ammunition for the next dip, which should not be too far away, in our view.”

— CNBC’s Yen Nee Lee contributed to this report.

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