S&P 500
7,579.00
-0.04%
Dow Jones
52,730.00
+0.02%
Nasdaq 100
29,507.20
-0.17%
Russell 2000
2,981.19
-0.01%
FTSE 100
10,451.30
-0.35%
Nikkei 225
66,970.10
-1.06%

Investing

Stock Indexes Without Apple

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By Douglas A. McIntyre Published
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The rapid rise in the value of Apple’s (NASDAQ: AAPL) shares has been credited with much of the improvement in the Nasdaq and S&P 500 over the past year. Apple’s market cap makes it a tremendous part, 12%, of the value of the Nasdaq. As Apple has fallen for five days in a row, the Nasdaq’s value has been hammered. Apple’s decline and its effect on the broader market make an argument that the indexes, particularly the Nasdaq, post two sets of values. One would include Apple and the other would not.

Apple’s drop has disguised the improvement in share value of several other large tech firms. Microsoft’s (NASDAQ: MSFT) shares have risen strongly in the past several days. The same is true of Intel (NASDAQ: INTC), Starbucks (NASDAQ: SBUX) and several dozen other corporations that would have significant weight as Nasdaq components but do not because of Apple.

There has never been an action to remove a single company from any major U.S. index. It would distort the value of that index, it would have been argued. That has been true of the large indexes for years and perhaps decades. But now Apple is an exception. Nasdaq needs to treat it as such and show its movement with and without Apple. Investors do not need a distorted view of the market.

Douglas A. McIntyre

Contact [email protected] for any questions or corrections.

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Comparisons to other companies are for informational purposes only and should not imply similar results. Past performance is not indicative of future results. Market shortfall are forward‑looking estimates and are subject to substantial uncertainty. Investments in private placements, and start-up investments in particular, are long-term, illiquid, speculative and involve a high degree of risk and those investors who cannot afford to lose their entire investment should not invest in start-ups

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About the Author Douglas A. McIntyre →

Douglas A. McIntyre is the co-founder, chief executive officer and editor in chief of 24/7 Wall St. and 24/7 Tempo. He has held these jobs since 2006.

McIntyre has written thousands of articles for 24/7 Wall St. He is an expert on corporate finance, the automotive industry, media companies and international finance. He has edited articles on national demographics, sports, personal income and travel.

His work has been quoted or mentioned in The New York Times, The Wall Street Journal, Los Angeles Times, The Washington Post, NBC News, Time, The New Yorker, HuffPost USA Today, Business Insider, Yahoo, AOL, MarketWatch, The Atlantic, Bloomberg, New York Post, Chicago Tribune, Forbes, The Guardian and many other major publications. McIntyre has been a guest on CNBC, the BBC and television and radio stations across the country.

A magna cum laude graduate of Harvard College, McIntyre also was president of The Harvard Advocate. Founded in 1866, the Advocate is the oldest college publication in the United States.

TheStreet.com, Comps.com and Edgar Online are some of the public companies for which McIntyre served on the board of directors. He was a Vicinity Corporation board member when the company was sold to Microsoft in 2002. He served on the audit committees of some of these companies.

McIntyre has been the CEO of FutureSource, a provider of trading terminals and news to commodities and futures traders. He was president of Switchboard, the online phone directory company. He served as chairman and CEO of On2 Technologies, the video compression company that provided video compression software for Adobe’s Flash. Google bought On2 in 2009.

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