Steve Jobs, the iconic leader of Apple Inc. who transformed the habits of generations of consumers by creating a slew of innovative products and has battled several illnesses in recent years, resigned as chief executive of the technology giant Wednesday, saying “the day has come” for him to step down.







Apple’s board appointed long-time lieutenant Tim Cook to replace him on Jobs‘s recommendation.






Jobs, who made everything from the personal computer to the iPod, iPhone and iPad a part of daily life, submitted a letter to the Apple board of directors announcing that he would leave as CEO.






Jobs will remain involved with the company. Apple named him to the position of chairman of the board of directors — a position which did not previously exist at the firm. Two board members have been serving as co-lead directors up to this point.






“People sold on the rumor, and may sell a little more on the news, but it’s way undervalued right now,” Sutherland said. “I think the fundamentals will eventually take over, and the stock will be a great buying opportunity.”

Investors and consumers have long feared the prospect that Jobs would soon step down from running the day-to-day operations of the company, given his talent for bringing new technology to large masses consumers in a palatable manner.

At the same time, he brought untold value to Apple shares, which have skyrocketed from around $9 a share a decade ago to more than $375 today, for a gain of more than 43 times.

Sales for the company are up 12-fold from a decade ago and have continued to climb thanks to an ever-evolving line of products that seem to resonate with the buying public. The concern is whether Apple can stay innovative without Jobs’s instincts to guide them.

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U.S. stocks extend weekly losing streak to four

“Given we have a high level of anxiety and we’re coming into a weekend, people would rather be flat than long,” said Randy Frederick, director of trading and derivatives at Charles Schwab Center for Financial Research.

“The only thing that would make it cascade below levels we put in last week was if we found the EU really turning into a banking crisis,” said Michael Gibbs, a managing director and director of equity strategy at Morgan Keegan.

The Dow Jones Industrial Average and the Standard & Poor’s 500 Index both closed out the week at levels above their closing lows of the prior week, when a volatile market had the Dow making triple-digit moves each day.

After climbing as much as 120 points during Friday’s session, the Dow industrials lost 172.93 points, or 1.6%, to end at 10,817.65, down 4% from the week-ago close.

Hewlett-Packard Co. weighed most heavily among the blue chips, off 20% a day after the personal-computer maker reduced its outlook and said it might spin off its PC unit. 

“H-P’s earnings met expectations, but [the company] downgraded its forecast for the rest of the year. The bigger problem is that we have very few retail and institutional players in this market,” Marc Pado, U.S. market strategist at Cantor Fitzgerald, wrote in an emailed note.

The market is “following a normal path of figuring out if the lows of last week are indeed the bottom for this correction, which is EU driven, and EU focused,” said Gibbs, a managing director and director of equity strategy at Morgan Keegan.

Should the index close below that level, “it stacks the odds the lows are not in,” said Gibbs. “You can’t draw a line in the sand, you have to eyeball that now expecting the market is going to bounce around it or even under.”

Flashbacks

“We had a crisis here in the fall of ‘08, and we’re getting flashbacks,” said Frederick at Charles Schwab, who also noted that open interest for equity options contracts hit a record high during the week, which “mostly means people are out there trading this market.”

Citigroup Inc. and J.P. Morgan Chase Inc. reduced their growth outlooks for the U.S. economy, while Germany’s chancellor rejected the notion of a jointly issued euro-zone bond.

In the coming week, seven S&P 500 companies are expected to report earnings. Of the 485 that have reported second-quarter results so far, 71% have exceeded Wall Street’s expectations, according to Thomson Reuters. 

Germany reiterates 'no' to eurobonds

BERLIN (AP) — Two leading German ministers reiterated their opposition to issuing jointly guaranteed European government bonds as a means to end the eurozone's crippling debt crisis.

Finance Minister Wolfgang Schaeuble told German news magazine Der Spiegel in its edition dated Monday that so-called eurobonds are out of the question as long as the currency zone's 17 nations still run their own fiscal policy, and that different interest rates for eurozone nations were needed to provide "incentives and the possibility of sanctions to enforce solid financial policy."

Schaeuble acknowledged that the EU must, and will, beef up its response to the crisis to assist the heavily indebted nations, but that "there won't be a collectivization of debt or unlimited assistance."

Chancellor Angela Merkel has long ruled out eurobonds, and Economy Minister Philipp Roesler joined the chorus Monday, describing jointly guaranteed debt as "the wrong way" out of the crisis.

"Eurobonds would mean that everybody shares the same interest burden which would be a punishment for (financially) sound nations," he was quoted as saying by German news agency dapd. "We cannot want this for Germany and for all other good states."

Eurobonds would be a major step toward the bloc's economic integration, and are billed by supporters as an overnight solution to the crisis. Italy, Greece, Belgium and Luxembourg are among the nations calling for eurobonds.

The debate over eurobonds has ratcheted up ahead of Tuesday's meeting in Paris between Merkel and French President Nicolas Sarkozy, though eurobonds are not expected to form part of the discussions.

"Eurobonds won't be an issue at the meeting tomorrow in Paris," Merkel's spokesman Steffen Seibert stressed Monday.

Instead, he said the two leaders will discuss strengthening financial and economic cooperation and governance across the eurozone.

"This is one of the lessons from the euro crisis ... we need a stronger economic cooperation across the eurozone," he added, declining to specify which concrete proposals will be discussed at the meeting.

The principle behind eurobonds is that European countries would guarantee each other's debts, so that investors would see the bonds as super-safe and loan at low interest rates. The hope is that lower borrowing costs would prevent any more financial bailouts.

But Germany as the most creditworthy European country fears it would face higher borrowing costs and more risks if it had to borrow jointly with financially shaky nations.

Eurobonds could drive down the borrowing costs for troubled eurozone countries immediately, but Germany maintains that cheap credit without a powerful European institution overseeing the member states' budget and fiscal policy cannot be a solution.

Skeptics also point out that the current European Union treaty forbids countries from assuming each other's debts, and say it would be difficult to avoid reckless countries borrowing too much on the good credit of the more careful ones.

The European Central Bank last week had to step in and start buying Italian and Spanish government bonds to drive down high interest yields that threatened those countries. The bank is shouldering the burden of fighting the crisis until national parliaments approve new powers for the European Union's bailout so it can buy government bonds or help recapitalize banks if necessary.

The focus in the markets later will be ECB figures indicating how much the bank splashed out last week supporting the bond markets of Italy and Spain.

U.S. stocks leap in another manic trading day

A drop in first-time jobless claims calmed nerves about the economy.

“In 2008 it felt apocalyptic; this just feels a little tiring,” said Jason Weisberg, a floor trader on the New York Stock Exchange and senior vice president at Seaport Securities

“It’s the new norm,” Alan Valdes, director of floor trade at DME Securities, said of the ongoing volatility.

After rising as much as 558.96 points, the Dow Jones Industrial Average ended up 423.37 points to 11,143.31, or 4% higher. The blue-chip index is now off 2.6% for the week, after four days of closing up or down 400 points or more.

 

For every stock that fell, a dozen gained on the New York Stock Exchange, where nearly 1.9 billion shares traded. Composite volume neared 7 billion.

“While the economy may not be getting better, jobless claims indicate that the labor market may not be getting worse,” said Dan Greenhaus, chief global strategist at BTIG LLC.

The Dow industrials on Monday tanked 634 points, only to rebound with a 429-point gain Tuesday. On Wednesday, the average fell 519 points in triple-digit moves reminiscent of Wall Street’s behavior during the financial crisis of late 2008.

 

“In 2008, the problem was a massive overhang of poorly understood, faulty mortgage-backed securities created and insured by U.S. financial institutions with virtually no reliable collateral,” noted Peter Morici, a business professor at the University of Maryland. “This time, the principal debtors are sovereigns with the capacity to tax and restructure debt.”

Investors lose a trillion dollars in one day

NEW YORK (CNNMoney) -- Investors lost a trillion dollars in the in the stock market Monday as the debt crisis in Europe, lackluster economic news and a downgrade to the U.S. credit rating spark fears of a double-dip recession.

The Wilshire 5000 Total Market Index, the broadest index of U.S. stocks, lost 891.93 points, or just over 7%, Monday. This represents a paper loss for the day of approximately $1.0 trillion.

Monday is the largest percentage drop for the Index since December 1, 2008 when it fell over 9%.

Since July 22, when Republicans abandoned debt negotiations with the White House for the third time that month, the index has lost $2.9 trillion in value.

Cynical investors, which could include any of the millions of Americans with pension plans, mutual funds or other retirement accounts, might be tempted to blame squabbling politicians in Washington for much of their ill fate. But experts say it's more complicated than that.

U.S. Treasuries are still safe! Sorta

Clark said the prospect of Italy or Spain defaulting on their debt, scant consumer spending and concern about the overall economy are causing the sell off in stocks.

"It's just fear, everything together," he said. "It's not just Washington."

Clark believes the market is way oversold.

Stocks did rally after the last big sell off following the financial crisis of 2008. The Wilshire Index remains 84%, or $6.9 trillion higher than it was in March 2009. But it's still $4 trillion lower than the market's pre-crisis high in 2007.

"This is the culmination of 60 years of have-it-now policies," he said, referring the deficits Washington has been running for so long. "[The downgrade] would have happened one way or another."

Ablin wasn't quite as upbeat as Clark in predicting the next rally, noting that his bank moved 10% of its $60 billion in assets under management into cash last week.

"Values are cheap and expectations are low," he said. "But I don't see a catalyst just yet." 

Credits -cnn

U.S Downgrade and Euro's Debt Crisis

HONG KONG (Reuters) - The U.S. dollar may weaken and Treasury yields rise when Asian markets reopen on Monday, though any selling in response to ratings agency S&P's downgrade of the United States is likely to be tempered by the escalating crisis in the euro zone.

The S&P cut in the U.S. long-term credit rating by a notch to AA-plus is an unprecedented blow and results from concerns about the nation's budget deficits and climbing debt burden. It called the outlook "negative," signalling another downgrade is possible in the next 12 to 18 months.

"The initial reaction will be a high degree of uncertainty and thus volatility since investors will not know where to turn for safety," said Mark Mobius, executive chairman of Templeton Emerging Markets group, in an email to Reuters.

"During the sub-prime crisis safety was in U.S. Dollars and U.S. Treasuries. Now that anchor to the global community is deteriorating," added Mobius, whose unit oversees $50 billion in emerging market assets.

Fears of a slide back into recession for the world's biggest economy prompted a global sell-off that wiped $2.5 trillion off company values over the past week, with consumer discretionary shares of firms dependent on external demand likely to be singled out for more punishment.

The fall in global share prices, as measured by the MSCI All-country World Index, was the biggest weekly decline since early October 2008, according to Thomson Reuters Datastream.

Market players warned the U.S. downgrade was likely to exacerbate a sharp contraction in risk appetite, and could see investors shift to the low-yielding Japanese yen and the Swiss Franc, despite market interventions from their respective authorities to weaken the currencies last week.

But they said fears that Europe's debt crisis could engulf core economies Spain and Italy, where sovereign debt yields have soared to 14-year highs, meant investors may still seek a safe-haven in the dollar, despite the U.S. woes.

Goldman Sachs strategists said there was a one-in-three probability of a U.S. recession due to the worsening European crisis, extension of payroll tax cuts and elevated levels of joblessness, despite a slight dip in the U.S. unemployment rate in July.

"Simply put, market sentiment appears acutely vulnerable given the build-up of concern on a sharper U.S. slowdown and speculation on the appropriate policy response and lingering fears stemming from the sovereign debt crisis in Europe," Citigroup strategists said in a note.

The benchmark MSCI all-country world stocks index fell to its lowest level since September 2010 last week, and has slumped more than 12 percent since late July.

The benchmark MSCI index of Asia Pacific ex-Japan stocks fell 8.7 percent last week.

Meanwhile, global leaders scrambled to discuss the U.S. sovereign rating downgrade and Europe's debt woes, and may issue a statement after a conference call, a Japanese government source said on Sunday.

Yields on benchmark U.S. ten-year treasury notes rebounded smartly to 2.56 percent on Friday but were not far away from a record low of near two percent hit during the throes of the global financial crisis.