Equity Markets

Microsoft Is About to Dethrone Apple as the S&P 500's Power Stock


Unless Apple’s (AAPL) share price turns positive and rallies over the next six weeks, its multiyear run as the most influential stock in the Standard & Poor’s 500 index will come to an end. Over the past four years, Apple’s strong stock performance has added the most S&P index points. Now it looks like Microsoft (MSFT) rules.

2006: Exxon
2007: Apple
2008: Wal-Mart Stores
2009: Apple
2010: Apple
2011: Apple
2012: Apple
2013: Microsoft?

Here’s why: The S&P 500 this year (through Monday’s close) is up 24 percent, or 346 index points (from 1,426 to 1,772).

That 346-point gain is split among 500 companies—on average, each company has contributed a gain of about 0.69 points to the index’s 2013 rise. All members of the S&P 500 are not created equal, however. A company’s effect on the index is based on the combination of its financial performance and weight in the index.

Here are the 10 most positive and negative contributors, ranked by index points:

Microsoft’s 9.23-point gain leads all companies, followed closely by Google (GOOG) at 9.17. Apple, with a drop of 1.59 points, has the most negative effect on the S&P this year.

Apple’s stock price is down only about 2 percent on the year—clearly not a hugely negative performance as an individual company—but Apple’s index weight is so large (3 percent) that even a small 2 percent stock drop is enough to cause the biggest drop—measured in index points—out of all 500 companies.

By comparison, in 2012 Apple had the biggest positive gain in the S&P—adding 13 full index points by itself (a big chunk considering the total of all 500 companies only added 169 points).

Going back even further, to the March 2009 index low (at 676), the S&P has gained nearly 1,100 points since then. These are the companies that led the way:

Even with Apple’s 2013 drop (and 500th place ranking), it still takes the top spot here, contributing over 44 points of index gain, more than the next two companies combined (General Electric (GE) and Google). If Apple had not been in the S&P, the index would only be about 1,728, rather than 1,771—not a huge difference in the big picture (we were at 1,728 just last month). No single company is that important to the overall story. Start to collect a few more companies, though, and the biggest ones start to add up.

The top 10 gainers are all major blue chips—like ExxonMobil (XOM), IBM (IBM), JPMorgan Chase (JPM), and Pfizer (PFE). These 10 companies added 201 points, or about 18 percent of the entire index’s performance since the bottom.

Here are a couple more names that stand out: At the bottom of the list, we find Newmont Mining (NEM)—its combination of performance and size gives it such a negative effect. It’s both bad enough and big enough to matter. Newmont is now in the bottom-10 list for the second straight year. Its chart has been going straight downhill since the beginning of 2012, losing over half its value.

More positively, the only company in the top 10 in both 2012 and 2013 is General Electric, which has seen its stock go straight up.

Eric-chemi
Chemi is head of research for Businessweek and Bloomberg TV.

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Companies Mentioned

  • AAPL
    (Apple Inc)
    • $102.0 USD
    • 0.42
    • 0.41%
  • MSFT
    (Microsoft Corp)
    • $46.55 USD
    • 0.03
    • 0.05%
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