Afternoon Roundup: Today's Top Stories
At The Motley Fool, we know our readers like to be informed. We have scouted out today's most relevant news items and brought them to you all on one page. We hope you find this midday edition informative and useful.
One of the biggest worries looming over Apple (NAS: AAPL) is whether it will be able to continue its splendid innovation without Steve Jobs. The co-founder of the company was known for micromanaging every aspect of the business, both his strength and weakness. Jobs maintained his post as CEO until a month before he passed away, worrying some that he had not left a plan in place.
But, since at least 2004, Jobs and the board had been putting in place programs that would help give the company direction. Among those programs were a slowdown of departing executives to build a talent base, retreats with the "Top 100" managers, and an in-house university that taught case studies of Jobs himself.
According to former employees, Apple's culture is based on a top-down mentality where developers are expected to meet managers' high expectations, but there is a belief that everyone's work is important. Many at the company believe Jobs had been, over time, grooming new CEO Tim Cook as his successor by promoting him and securing his position at the company. Read more atThe Wall Street Journal.
Ratings agency Moody's downgraded 12 British banks, including Lloyds TSB Bank and Royal Bank of Scotland (NYS: RBS) . The agency said David Cameron's government would likely be unable to provide more support for the banks, hence justifying the downgrade. In 2008, Lloyds and RBS were appropriated by the state as they faced financial demise. Without the support, the banks would have likely failed.
Some have said the reason the government won't back up the banks is to deal with the notion that they are just too big to fail. Some saw the Vickers Commission report, which called for the separation of retail and investment banks, as a way the government would control the phenomena. Moody's downgraded Lloyds and Santander U.K. from A1 to Aa3; Co-Operative Bank to A3 from A2; RBS and Nationwide Building Society to A2 from Aa3. HSBC (NYS: HBC) and Barclays rating remained unchanged. Read more atThe New York Times.
As I write this, Sprint shares are down more than 10% after gaining more than 10% in early trading. After the release of the revamped version of the iPhone, the iPhone 4S, Sprint (NYS: S) hopes the device will be one of its most profitable products. Sprint, the third-largest wireless carrier, had been excluded from the group of companies allowed to sell the phone, which was made up of AT&T (NYS: T) and Verizon (NYS: VZ) .
Investors were anxious the new device would hurt Sprint instead of giving it an additional boost, but CEO Dan Hesse said he believes the new phone will do the exact opposite. Hesse's words helped calm investors' fear, pushing the company's stock up 13%. AT&T and Verizon were negatively affected at first by the iPhone's high prices, but in the long run they did gather higher-paying customers on two-year contracts. However, the market reacted negatively after factoring in Sprint's need to raise additional capital to fund a network upgrade as well as the iPhone subsidies. Read more atBloomberg.
Job gains for the month of September were higher than expected, while the revised number for July and August went up, easing fears of a second recession. However, unemployment remained at 9.1%, pressuring the government to give the economy a much-needed jolt. September's numbers were aided by the return of 45,000 telecom workers who had been on strike. Nonfarm payrolls increased by 103,000, according to the Labor Department. Private employment also accelerated to 137,000 from a meager 42,000 the previous month. Read more atReuters.
So there you have it, the top financial stories for this afternoon. If you are interested in getting all the news and commentary on these stocks sign up to My Watchlist here -- it's free!
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At the time this article was published Michelle Zayed doesn't own any stocks mentioned. The Motley Fool owns shares of Apple.Motley Fool newsletter serviceshave recommended buying shares of AT&T and Apple.Motley Fool newsletter serviceshave recommended creating a bull call spread position in Apple. Try any of our Foolish newsletter servicesfree for 30 days. We Fools may not all hold the same opinions, but we all believe thatconsidering a diverse range of insightsmakes us better investors. The Motley Fool has adisclosure policy.