Today: Activist investor Carl Icahn drops his battle for bigger Apple return to investors, Tesla roars to record high ahead of earnings, investigation's completion.

The Lead: Icahn gives up campaign to increase Apple's share-repurchase plan

Carl Icahn's boisterous battle with Apple that sought a larger return to investors ended Monday, with the activist investor announcing that he will withdraw his proposal for $50 billion in additional share repurchases that was to be presented at the Cupertino company's annual shareholders' meeting later this month.

Apple shares gained 1.8 percent to $528.99, the highest closing price for the stock since a large drop following its fourth-quarter earnings report, after Icahn made the announcement Monday in an open letter to the same shareholders he was attempting to persuade, in which he pointed to Apple's recent repurchase of $14 billion worth of shares in just two weeks.

"These recent actions taken by the company to repurchase shares have been both 'opportunistic' and 'aggressive' and we are supportive," Icahn wrote, later adding, "we see no reason to persist with our nonbinding proposal, especially when the company is already so close to fulfilling our requested repurchase target."


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Icahn began his campaign in August, when he announced that he had purchased $1 billion worth of Apple stock, which he characterized as "undervalued." Icahn immediately began agitating for Apple' to increase the size of its plan to return some of its large cash hoard to investors, which CEO Tim Cook announced in April and touted as the largest in corporate history at $100 billion, with $60 billion aimed at share repurchases.

Icahn has continued to add to his Apple investment, pushing his outlay on Apple shares to more than $4 billion as of last month, when he announced three separate purchases of about $500 million worth of shares in a week. However, shareholders with similar or larger stakes -- Icahn has still amassed less than 1 percent of the company -- came out against his plan recently, which seemed to have an effect on Icahn's plan.

Two of the nation's largest pension funds, the California Public Employees Retirement System and New York City's equivalent, had opined against Icahn's plan, with New York City Comptroller Scott Stringer writing Monday, "the proposal is a shortsighted and unnecessary attempt to boost Apple's current stock price at the expense of its long-term financial flexibility and value creation potential."

Perhaps most influential was Institutional Shareholder Services, an advisory firm that came out against Icahn's plan Sunday, which Icahn mentioned prominently in his letter.

"The board's latitude should not be constricted by a shareholder resolution that would micromanage the company's capital allocation process," ISS wrote.

Analysts pointed out that Apple's recent ramped-up stock repurchases were partly a reaction to Icahn's activism, a change in the way the company has operated in the past.

"It looks like Icahn's crusade paid off. Apple's board and Icahn are meeting halfway," independent investment manager Antony Filippo told Reuters. "Icahn wanted to spawn change and he got a little bit of that. Apple buying $14 billion around the $500 mark is huge. They would have never done that without an activist breathing down their neck."

"Their behavior towards the Street has changed," Peter Karazeris, a senior analyst at Apple investor Thrivent Financial for Lutherans, told Bloomberg News. "They seem to be more cognizant of things related to their stock."

After the bell, Apple received less celebratory news, as the company lost a legal appeal seeking the removal of an antitrust monitor appointed after the company's defeat in its e-books price-fixing trial.

SV150 market report: Tesla Motors hits record high, flirts with $200

Wall Street experienced slight gains in a tame trading session Monday, but technology stocks had a stronger session as the tech-heavy Nasdaq led the three major indexes in percentage gain and Silicon Valley stocks benefited from a record-breaking move by Tesla Motors.

Tesla jumped to record intraday and closing prices Monday, nearly cresting $200 for the first time in reaching as high as $199.30 and closing with a 5.4 percent gain at $196.56. CNN Money credited China's subsidies for electric vehicles coming in higher than originally expected, though Bloomberg News pointed out that Tesla will not be a part of the incentive program as a foreign company. The electric car company recently announced that it will not charge Chinese consumers more than those in the United States, beyond tariffs forced by the world's most populous nation, a decision many in China have heralded. Tesla is scheduled to release fourth-quarter and full-year results Feb. 19, though the Palo Alto company already showed off preliminary fourth-quarter numbers that beat expectations during a presentation at the North American International Auto Show in Detroit last month.

After topping Exxon Mobile to become the world's second-most valuable company Friday, Google fell 0.4 percent to $1,172.93, then announced after the bell that it had reached agreement with NASA and the federal government on a lease for Moffett Field that will result in Hangar One being re-skinned. Facebook dropped 1.2 percent to $63.55 while touting its television influence, and CEO Mark Zuckerberg came in atop a list of philanthropic donations for the $1 billion he gave the Silicon Valley Community Foundation. Rival Twitter dropped 2.6 percent to $52.92 while doubts persisted about its potential popularity, and LinkedIn could not bounce back from post-earnings weakness at the end of last week, dropping 1.1 percent to $207.33. One social stock headed up Monday: Yelp reached all-time highs and closed with a 1.9 percent gain at $91.11 after reportedly signing a deal with Yahoo that will place Yelp's results prominently in Yahoo searches. Yahoo gained 1.4 percent to $37.76, and its Chinese investment, Alibaba, bid nearly $1.6 billion for a Chinese mapping company.

Up: Tesla, AMD, Gilead, SolarCity, Yelp, Apple, Juniper, VMware, SunPower, Adobe, Yahoo, Splunk, Pandora, NetApp, Cisco, Zynga

Down: Twitter, eBay, Facebook, Electronic Arts, LinkedIn, Ruckus, Hewlett-Packard, Salesforce, Workday, Google

The SV150 index of Silicon Valley's largest tech companies: Up 8.79, or 0.58 percent, to 1,521.41

The tech-heavy Nasdaq composite index: Up 22.31, or 0.54 percent, to 4,148.17

The blue chip Dow Jones industrial average: Up 7.71, or 0.05 percent, to 15,801.79

And the widely watched Standard & Poor's 500 index: Up 2.82, or 0.16 percent, to 1,799.84

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/jowens510.