Who are the heavyweights of the stock market?
At US$660 billion, Apple is the stock market’s heavyweight.
Like a handful of other “big cap” companies such as Microsoft and Exxon Mobil, the iPhone maker’s market value means that when its shares move, so can the market. And these are the companies that influence your stock portfolio.
“The combination of Apple’s size and price moves, results in an enormous impact on indices,” says Howard Silverblatt, a senior index analyst for S&P Dow Jones Indices.
Lately, Apple’s been a drag.
Since closing at a record US$133 on Feb. 23, Apple has slumped to US$116.53, wiping more than US$ 120 billion off
influence has the value of its stock. Between then and Tuesday’s close, the Standard & Poor’s 500, the most widely-tracked stock index, was down 0.8 percent.
Without Apple, the decline would have been 0.2 percent, according to S&P Dow Jones Indices, the company behind the S&P 500 index and the Dow Jones industrial average.
Of course the opposite is also true, when Apple’s shares rise, the market can get a lift.
The impact of the technology giant is so big that S&P Dow Jones Indices has created a technology index that excludes Apple.
That allows investors to separate what’s going on with tech stocks from what’s going on with Apple because, while they’re similar, the two might not be the same.
For example, the S&P 500 information technology sector is down 2.3 percent since Apple’s record close. Take out Apple and the group has actually gained 0.7 percent.
History suggests that companies as dominant as Apple don’t tend to stay top dog for long. Competitors emerge, new products roll out, and growth can slow.
Exxon Mobil, which Apple surpassed to become the biggest publicly-traded company in August 2011, has slumped over the last year along with the price of oil. To be sure, Exxon Mobil is still big, with a market value of US$323 billion, but it has slipped to third in the ranking of S&P heavyweights, behind Microsoft.
In the early 1980s, computer company IBM was the stock mar- ket’s big gun. Personal computers were still a new concept and IBM was one of the industry’s dominant players. At the end of 1985, the company’s stock made up 6.4 percent of the S&P 500’s total value, much bigger than Apple’s current 3.6 percent.
Since then, the company has had to grapple with fierce competition from more nimble rivals. Like Exxon, Big Blue is still powerful, but it now ranks as the 28th largest in the S&P 500, making up 0.8 percent of the index.
In this May 9, 2013 file photo, people walk near the Apple store in Santa Monica, California. Even after its recent slump, Apple’s market value is still two thirds bigger than Microsoft, the next biggest publicly traded company in the U.S.