U.S. stocks' big five make their industries appear heavy

U.S. stock investors need to be mindful of a “heavy concentration” in industry groups encompassing the S&P 500 Index’s five most valuable companies, David Kastner, a strategist at Charles Schwab Corp., wrote Thursday in a blog post. Two of them, Apple Inc. and Microsoft Corp., are part of the technology group. Google’s owner, Alphabet Inc., and Facebook Inc. are both in communications services. Amazon.com Inc. is a consumer-discretionary company. The sectors together exceeded 50% of the S&P 500’s weight from Aug. 18 through Thursday, according to data compiled by Bloomberg. They were last above that threshold in 2000, when their total weight peaked at 54%.

Apple, Microsoft become S&P 500's biggest duo in decades

Apple Inc. and Microsoft Corp. play a bigger role in the S&P 500 Index these days than any two companies have in decades. The maker of iPhones and the supplier of Windows software accounted for 12.5% of the index’s value between them as of Tuesday. Their combined weight exceeded every year-end total for the S&P 500’s top two companies since 1980, according to data compiled by Bloomberg and S&P Dow Jones Indices LLC. International Business Machines Corp. and American Telephone & Telegraph Co. together were 10.9% of the index in 1982, before AT&T was broken up.

 

Five biggest companies in the S&P 500

There’s a distinction to be made between the S&P 500 Index’s five biggest companies and all the rest, according to BCA Research. The firm compared the total market value of the five -- Amazon.com Inc., Apple Inc., Facebook Inc., Google owner Alphabet Inc. and Microsoft Corp. -- with the value of the other 495 companies in a chart last week. The top five’s value increased 266% from the start of 2015 through Tuesday, according to data compiled by Bloomberg. In the same period, the value of the rest rose just 25% -- and the entire gain occurred after the S&P 500 set this year’s low in March.

Apple, Microsoft pack S&P 500's biggest punch in decades

Apple Inc. and Microsoft Corp. have more power to set the S&P 500 Index’s course than any two companies have had in decades. Their combined weight closed at more than 10% on Monday for the first time ever, according to data compiled by Bloomberg. The total exceeded a December 1999 peak of 9.4% for Microsoft and General Electric Co., which had the most weight back then. The S&P 500’s top-two weights since the mid-1980s were cited in a Twitter post Monday by Carter Worth, head of technical analysis at Cornerstone Macro LLC.

Years of Nasdaq beating S&P 500 may be at an end

Nasdaq stocks are in danger of losing their long-held status as U.S. market leaders, according to Michael Shaoul, chief executive officer at Marketfield Asset Management LLC. He raised the possibility in a report Thursday that tracked the ratio between the Nasdaq 100 and S&P 500 indexes. The ratio has fallen as much as 5 percent since July 25, when it peaked after rising 163 percent from a low in September 2002. Losses may mount, Shaoul wrote, because of concern about “future growth or profitability” for Apple Inc. and the four FANG stocks: Facebook Inc., Amazon.com Inc., Netflix Inc. and Alphabet Inc., Google’s owner.