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* * * * * * FRIDAY, APRIL 25, 2014 ~ VOL. CCLXIII NO. 96 WSJ.com HHHH $2 .00

DJIA 16501.65 unchanged NASDAQ 4148.34 À 0.5% NIKKEI 14404.99 g 1.0% STOXX600 336.13 À 0.3% 10-YR. TREAS. unchanged , yield 2.686% OIL $101.94 À $0.50 GOLD $1,290.50 À $6.30 EURO $1.3832 YEN 102.31

The View From the TopA High-Stakes Art World Detective Story

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CONTENTSArt...................................D2-3Books............................D6-7Corporate News.....B2-5Global Finance.............C3Heard on Street..........C8In the Markets............C4

Mansion...................M1-12Marketplace..................B6Opinion.....................A11-13Sports.............................D12U.S. News...................A2-6Weather Watch..........B6World News...........A7-10

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What’sNews

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World-WidenUkrainian forcesmoved inon a pro-Russian stronghold,killing several militants in afirefight, but halted their ad-vance after Russia activatedtroops across the border.A1, A8n Israel suspended peacetalks with the Palestinians inretaliation for a plan to bringFatah and Hamas together ina unity government. A10n Obama assured Japanthat if islands at the centerof a territorial dispute withChina were ever attacked,the U.S. would aid Tokyo. A7n A Japanese company paidnearly $40 million to free aship impounded by China. A7n An Afghan policemanopened fire at a hospital runby a U.S. charity in Kabul,killing three Americans. A7nA radioactive leak at a nu-clear-waste site in NewMexicowas preventable and the resultof management error, the En-ergy Department said. A6n Oregon should switch tothe federal health-insuranceexchange next year, the staffof the state’s system said. A3nRome is bracing for up to amillion pilgrims for Sunday’scanonization of Pope JohnPaul II and Pope John XXIII. A9nThe VA expanded a probe ofa Phoenix hospital where vet-erans allegedly died amid longwaits for appointments. A2n A suicide bomber killed atop Pakistani counterterror-ism officer and three othersin an attack in Karachi. A9n South Sudan’s army chiefwas replaced after troops lostkey territory to rebels. A9

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Mortgage lending fell 58%in the first quarter from a

year earlier to a 14-year lowamid a drop in refinancing andtepid demand for new loans. A1n Amazon is testing its owndelivery network for the lastleg of a package’s journey. Thecompany’s first-quarter reve-nue jumped 23%. A1, B4n Apple, Google, Intel andAdobe agreed to settle a suitalleging they conspired to notrecruit each other’s workers. B1n Alibaba is consideringadding new shares to its IPO,a move that could make thesale the largest in history. C1nMicrosoft said operatingprofit rose 4.3% as it postedstrong sales to both commercialcustomers and consumers. B3n GE is pursuing talks toacquire the energy opera-tions of France’s Alstom. B1n GM’s first-quarter profitplunged on recall and othercharges even as vehicle salesand prices increased. B1nBofA’s ex-CFO agreed topay $7.5 million to settle a suitalleging the bank misled inves-tors in its deal for Merrill. C1nThe Dow ended flat for thefirst time since 2001. Apple re-sults lifted tech shares. C4nZimmer agreed to buy rivalorthopedic-device maker Bi-omet in a $13.35 billion deal. B1nKKRplans to let investors sellportions of buyout-fund stakeson a new privatemarket. C1n A KPMG ex-partner wassentenced to 14 months inprison for insider trading. C3

Business&Finance

the restive east, or riskmore blood-shed and provoking an invasion.

Acting President OleksandrTurchynov, who had ordered themilitary operation to restart onTuesday, vowed it would continueeven as a security official in Kiev

said the operation in the easterncity of Slovyansk had been pausedfor reworking. Ukraine’s ForeignMinistry gaveMoscow 48 hours toexplain themilitary exercises alongthe border.

The Pentagon called thosedrills “exactly the opposite ofwhat we have been calling on theRussians to do.”

U.S. officials said they didn’tknow if the drills meant RussianPresident Vladimir Putin intends tointervene militarily in Ukraine.

Some officials said they think it is ashow of strength to reinforce hisposition before moving to reducetensions and solidify his gains.

“We see movement, motionand activity,” said a senior mili-tary official. “It looks like muscleflexing by Moscow. But is it morethan that?”

President Barack Obama saidPleaseturntopageA8

Ukrainian forces moved in ona pro-Russian stronghold Thurs-day, killing several militants in afirefight at a roadside check-point, but quickly halted theiradvance after Russia activatedthe thousands of troops it hasmassed just across the border.

Moscow’s saber-rattling—launching new land and airmilitarydrills—left Ukraine’s new govern-ment in a quandary: whether torisk pressing ahead with what itcalls its antiterrorist operation in

By Lukas I. Alpert inMoscow and Julian E.Barnes in Washington

Ukraine Halts Military Push,Fearing Attack From Russia

Ukrainian soldiers moved against pro-Russian forces in Slovyansk on Thursday. Kiev halted the advance after Russia activated troops across the border.

Mortgage lending declined tothe lowest level in 14 years in thefirst quarter as homeownerspulled back sharply from refi-nancing and house huntersshowed little appetite for newloans, the latest sign of how ris-ing interest rates have dented thehousing recovery.

Lenders originated $235 bil-lion in mortgage loans duringthe January-March quarter,down 58% from the comparableperiod a year ago and down 23%from the fourth quarter of 2013,according to industry newsletterInside Mortgage Finance.

The decline shows how themortgage market is experiencingits largest shift in more than adecade as an era of generallyfalling interest rates that beganin 2000 appears to have run itscourse. The average 30-yearfixed-rate mortgage stood at4.5% last week, up from 3.6%last May, when interest ratesshot up in reaction to the Fed-eral Reserve’s initial indicationthat it might reduce a bond-buy-ing campaign that was, in part,designed to keep a lid on long-term rates like mortgages.

The decline in mortgage lend-ing last quarter stemmed almostentirely from the slide in refi-nancing. Loans for home pur-chases were basically flat from ayear earlier and down from thefourth quarter.

The lending news could disap-point economists looking for apickup in housing constructionand new-home sales this yearthat could drive growth as othersegments of the economy areshowing signs of rebounding aftera winter lull.

“A strong housing rebound isan important component of mostforecasts that suggest that GDPgrowth will be stronger than theeconomy’s ‘potential’ rate overthe next two years,” Eric Rosen-gren, president of the Boston Fed,said in a speech last week.

Softness in the housing mar-ket, if it deepens and underminesthe broader economic outlook,could complicate the Fed’s effortsto dial back easy-money policiesdesigned to support the recovery.Applications for purchase mort-gages last week ran nearly 18%below the level of a year ago,even as the average loan amount

Pleaseturntothenextpage

BY NICK TIMIRAOS

HomeLoanDemandPlungesInterest-Rate JumpPuts MortgagesAt 14-Year Low

Yes, We Have No Limes:Shortage Squeezes Bars, Eateries

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Restaurants Ask Customers to HarvestFrom Home; Turn Lemons Into Limeade?

FULLERTON, Calif.—WhenMatador Cantina’s general man-ager Dave Dennis saw recentlythat a sharp rise in the price oflimes was puttingthe squeeze on thisMexican restau-rant, he called hismother.

But the limes onthe tree in her yardhere weren’t ripe.So he asked hisstaff to hit up theirfriends for limes.He got just a few.With his cantina in need of 1,000limes a week to use in cocktails,Corona beer and food, he decidedto go public.

“Bring us a bag full of limes

and get a crafted cocktail for just25 cents,” Mr. Dennis posted onFacebook and Twitter. He put upa sign in the restaurant: “WEWANT YOUR LIMES.”

Bars and restaurants acrossthe country have been affected by

what they are call-ing the “great limecrisis of 2014.” Andthe timing couldhardly be worse: Itcomes just as thefruit’s highest-pro-file day of the yearis approaching—themargarita-fueledCinco de Mayo.

In Mexico, theholiday commemorates the Mex-ican army’s victory over Frenchforces at the Battle of Puebla onMay 5, 1862. In the U.S., Cinco

PleaseturntopageA6

BY MIRIAM JORDANAND JOSÉ DECÓRDOBA

The future of Amazon.com Inc.is hiding in plain sight in a SanFrancisco parking lot.

Adjacent to recently closedCandlestick Park, Amazon is test-ing its own delivery network forthe “last mile,” the final leg of apackage’s journey to consumers’doorsteps. Trucks loaded withAmazon packages and driven byAmazon-supervised contractorsleave for addresses around SanFrancisco. Similar efforts are un-der way in Los Angeles and NewYork.

Delivering its own packageswill give Amazon, stung by Christ-mas shipping delays, more controlover the shopping experience. Itcan also help contain shipping ex-penses, which have grown as apercentage of sales each yearsince 2009.

On Thursday, Amazon reportedanother quarter of skimpy profiteven as sales increased 23% to

Pleaseturntothenextpage

BY GREG BENSINGERAND LAURA STEVENS

Amazon TestsOwn DeliveryIn Shot atBig Shippers

MichalB

urza/Zum

aPress

European Union, it was a gateway for greater eco-nomic cooperation with Syria.

But those hopes—along with a boom thatbrought a face-lift to Aleppo’s historic center aswell as some new luxury boutique hotels—havegradually turned into a nightmare. The initial shiftwas when the impoverished and less developedcountryside, which supplied much of the labor forthe factories, rose up in solidarity with other partsof Syria against Mr. Assad. Peaceful protests, in-cluding in some working class sections of the cityand at universities, were brutally suppressed byhired thugs on the payroll of some businessmen,say residents.

The descent into the abyss for many Aleppans,including Mr. Kudsi, came when rebels mainly fromthe countryside mounted a coordinated assault inJuly 2012 on military and security positions across

PleaseturntopageA10

ALEPPO, Syria—Months before the uprisingagainst President Bashar al-Assad in March 2011,Aleppo entrepreneur Abdul-Latif Kudsi opened astate-of-the-art denim factory in his native city inpartnership with an Italian businessman.

They sunk the equivalent of $5 million into theventure and production was exclusively for leadingEuropean designers, says the 69-year-old Mr. Kudsi,a member of a prominent Aleppan family thatcounts Ottoman pashas in its lineage.

At the time Aleppo, Syria’s largest city withabout three million people and its economic hub,was undergoing rapid transformation and a truecoming of age. Several industrial zones housingmainly garment and textile factories had sprung upall around this northern Syrian city, located a mere40 miles from the Turkish border. In the eyes of the

BY SAM DAGHER

‘WE ARE DESTROYED’

Caught in Syrian Crossfire,Civilians Weary of Revolt

GE Powers Up With a French Connection

BIG SWITCH: General Electric is in talks to acquire Alstom SA’s energybusiness. Above, an electrical coil is moved into position at the Frenchcompany’s Stafford, U.K., factory. B1

Bloomberg

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Divided in Eastern Ukraine..... A8 Politician’s death stirs fears... A8

Heavy LoadAmazon wants to tame deliveryexpenses. Fulfillment costs as apercentage of sales:

The Wall Street Journal

Source: the company

16

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’13 ’142012

1Q 201414.8%

Factories get fresh sign ofa spring thaw................................. A2

Microsoft beats estimates...... B3 Amazon defends Prime............. B4 UPS sees health-plan charge....B5

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