Apple’s market clout shaking S&P 500, making a run at $500B market cap

9to5 Staff | Feb 15 2012 - 7:33 am PT

Apple’s record-breaking holiday quarter catapulted the stock north of $500 a share for the first time, and now the company’s market size is skewing some pretty important market indices, including the S&P 500 index. Already Apple of California passed 10 percent of all of NASDAQ value and now the company won an “ex-” designation on the S&P 500 index. Beginning in 1957, S&P has published prices of 500 large-cap common stocks actively traded in the United States through the New York Stock Exchange or the NASDAQ. S&P 500 fourth-quarter earnings increased a whopping 6.6-percent year-over-year due to Apple’s gangbuster quarter. Without Apple, S&P 500 grew only 2.8 percent (click the illustration).

The company’s share of S&P 500 now stands at 3.8-percent. For comparison’s sake, Exxon Mobil’s share of S&P 500 is 3.3-percent, Microsoft’s 1.9-percent and IBM’s 1.85-percent. This prompted institutions such as Morgan Stanley, Goldman Sachs, Barclays Capital, Wells Fargo, and UBS AG to begin publishing one version of market updates for the companies that make up the S&P 500 and the other for S&P 500 excluding Apple.

Crazy or what? Here are some more nuggets from Wall Street Journal’s Jonathan Cheng:

Apple is the biggest earnings contributor to the S&P 500 and it especially affects the tech market. For example: An estimated 21 percent annual earnings increase for the tech sector shrivels to just 5 percent once Apple is factored out. Barclays Capital’s Barry Knapp explained:

“What’s happening with Apple is real, because Apple’s earnings are real and any wealth accruing to Apple gets into the hands of U.S. shareholders. But to actually be able to look at trends and look at what’s happening to [other companies], not just the one that’s so exceptional, it is important to strip Apple out.

Apple’s growth prompted a rebalancing of the Nasdaq-100 index last April by cutting the company’s weighting from 20.49-percent down to 12.33-percent. Apple currently has a 16.6-percent weighting on the Nasdaq-100 index, which is more than Google, Intel, and Amazon.com combined. CEO Tim Cook said during yesterday’s Goldman Sachs conference (audio transcript) that Apple would continue to judiciously use its $100 billion cash pile, noting it is enough to run the company. As you know, Apple does not currently pay dividends on its common stock and it only paid dividends from June 15, 1987 to Dec.15, 1995. Cook also touched on worker safety at Foxconn factories, Apple TV’s “hobby” business, strong iPad performance, and the 37 million iPhones sold in the holiday quarter. Markets reacted positively to Cook’s remarks: AAPL currently trades at $519.69 a share for a market valuation of $483.1 billion, making a run at $500 billion market capitalization.