(Reuters) - Service sector activity growth slowed in September, but other data on Wednesday showed private employment up modestly for the month, suggesting that overall the economic recovery is sluggish. Service sector activity slowed as a contraction in employment eclipsed a jump in new orders, but a second report showed private-sector employers overall added more jobs than expected, while a third report showed a jump in planned layoffs in the month.

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(Reuters) - Rival smartphone makers could exploit a rare letdown by Apple in the launch of its new iPhone 4S model, which failed to wow fans, and grab a bigger share of the most lucrative part of the phone market. However, analysts also noted that Apple's decision to keep older iPhone models and slash their prices, would help the U.S. firm to reach the bigger, mass market, where it will be in more direct competition with phones using Google's Android software.

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(Reuters) - Large banks need to tie more employees' compensation to the risk their decisions pose to the banks through such things as deferred pay, the Federal Reserve said in a report released on Wednesday. The Fed said, however, that banks continue to make progress toward better aligning compensation and risk-taking.

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(Reuters) - Moody's lowered its rating on Italy's bonds by three notches on Tuesday, saying it saw a "material increase" in funding risks for euro zone countries with high levels of debt and warning that further downgrades were possible. The agency downgraded Italy to A2 from Aa2, a lower rating than it holds on Estonia and on a par with Malta and kept a negative outlook on the rating.

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(Reuters) - Stocks continued to cut losses on Tuesday, with the Nasdaq Composite up 1 percent briefly after Federal Reserve Chairman Ben Bernanke said he was prepared to take more steps to help the fragile economic recovery. The Dow Jones industrial average was down 112.91 points, or 1.06 percent, at 10,542.39. The Standard & Poor's 500 Index was down 4.99 points, or 0.45 percent, at 1,094.24. But the Nasdaq Composite Index was up 18.37 points, or 0.79 percent, at 2,354.20.

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(Reuters) - The Federal Reserve is prepared to take further steps to help an economic recovery that is "close to faltering", Fed Chairman Ben Bernanke said on Tuesday. Citing anemic employment, depressed confidence and financial risks from Europe, Bernanke urged lawmakers not to cut spending too quickly in the short term even as they grapple with trimming the long-run budget deficit.

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(Reuters) - European finance ministers are considering making banks take bigger losses on Greek debt and have postponed a vital aid payment to Athens until mid-November, setting up a crunch point in the euro zone's sovereign debt crisis. Greek Finance Minister Evangelos Venizelos said the country had enough cash to cope until then and insisted that euro zone ministers were not preparing for a Greek default, despite the ominous delay. "There is no discussion of default," Venizelos told a news conference on returning to Athens on Tuesday.

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(Reuters) - European Union regulators will formally object to the proposed merger of Deutsche Boerse (DB1Gn.DE) and NYSE Euronext (NYX.N) this week, two sources with knowledge of the case said, which may force the companies to offer concessions to ease competition concerns. "The European Commission is expected to send a statement of objections to the parties this week," one of the sources said on Tuesday, declining to provide more details because of the sensitivity of the subject.

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(Reuters) - Sprint Nextel shares fell as much as 17 percent on Tuesday as investors worried about the cost of selling the Apple Inc iPhone on top of its plans to upgrade its network and its debt obligations. The decline followed a 10 percent dive in Sprint's stock on Monday after a Wall Street Journal report that the money-losing company will have to pay Apple $20 billion over the next four years and will lose money on the iPhone until 2014.

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(Reuters) - Stocks erased gains that came after a stronger-than-expected ISM manufacturing report on Monday and traded around breakeven as investors continued to focus on Europe's debt crisis. The Dow Jones industrial average dropped 5.44 points, or 0.05 percent, to 10,907.94. The Standard & Poor's 500 Index fell 0.46 points, or 0.04 percent, to 1,130.96. The Nasdaq Composite Index was off 3.11 points, or 0.13 percent, to 2,412.29.

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