Technology: Steve Jobs leaves Apple, U.S. economy tanks?
It appears that Steve Jobs' ailments finally forced him to step down as chief executive of Apple, the company he co-founded, left and then rejoined to lead to the top of the tech world (and, briefly, the largest market value of any publicly traded company in the U.S.). He'll stay on as chairman of the board, but he's not likely to be the singular force at the company that he's been for the last 15 years.
The days to come will surely bring think pieces galore by journalists on Jobs and Apple's future. I'll leave them to comment on what the man behind the world's best Reality Distortion Field has meant to Apple and what Apple has meant to the technology, consumer electronics and entertainment industries. At the moment, I'm more interested in the effect of Jobs' move on the stock market's delicate psyche -- and the animal spirits of the economy.
From a purely technical standpoint, investors have been putting a lower value on Apple (in terms of a price/earnings ratio) than they did in 2008 or even in 2010. Nevertheless, after-hours traders reacted the same way to Wednesday's news as they did the three times Jobs took medical leaves -- they sold heavily, driving Apple's share price down more than 5% by 5 p.m.
Maybe it's just profit-taking by those who suspect (rightly) that a mob of people will rush to exit Apple's stock after they hear about Jobs stepping down. After all, the change at Apple may not be all that dramatic. Jobs' chosen successor as CEO, Tim Cook, has spent much of the last seven years running the company in his absence, and it's been a seemingly unstoppable juggernaut of innovation throughout.
Regardless, the timing isn't good for the market as a whole. The Dow has climbed for three straight days, but it's still down sharply from the peaks it reached in May and July, and it's still subject to wild mood swings. If one of the top companies on the exchange gets hammered after the market opens Thursday, how will other stocks stand up?
The market's fortunes are important in part because they bear heavily on the public's sense of wealth and its confidence about the economy. The latter has been slipping into dangerous territory lately, one of several emerging warning signs of a double-dip recession.
Granted, it's a stretch to think that Jobs' resignation as CEO will perform reverse alchemy on Apple, let alone sink the entire economy. But nerve-wracking times such as these tend to make every bit of bad news seem portentous. Here's hoping things are better than they seem, both for Jobs and for the rest of us.
-- Jon Healey
Photo: Apple CEO Steve Jobs at an Apple event in March in San Francisco. Credit: Jeff Chiu / Associated Press