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Tech stocks have been getting a lot of the credit for this latest leg of the stock rally. The sector is up the most this year among the S&P 500′s .bgChannel, .bgRealtimeChannel, .bgRevision { display: none; } /quotes/zigman/3870025 SPX 10 subgroups, gaining 14%. The Nasdaq Composite .bgChannel, .bgRealtimeChannel, .bgRevision { display: none; } /quotes/zigman/123127 COMP , heavily weighted toward tech, has gained about twice as much as the Dow Jones Industrial Average .bgChannel, .bgRealtimeChannel, .bgRevision { display: none; } /quotes/zigman/627449 DJIA , or 13%.
But on closer look, the credit might be more accurately applied to just one big name — Apple Inc. .bgChannel, .bgRealtimeChannel, .bgRevision { display: none; } /quotes/zigman/68270 /quotes/nls/aapl AAPL
Howard Silverblatt of S&P Indices apparently spent his Presidents Day Holiday with a deep-dive into a recent debate: how earnings/stocks/life-in-general would be if you took the technology superstar out of the picture. Read related WSJ story on how Apple is clouding strategists’ view of the market.
It doesn’t, it turns out, look that pretty.
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As of Friday’s close, the IT sector was up 9.81% from the S&P 500 October 2007 market high.
Take out Apple, and the IT sector — tracked by Technology Select Sector SPDR Fund .bgChannel, .bgRealtimeChannel, .bgRevision { display: none; } /quotes/zigman/1475411 /quotes/nls/xlk XLK was down 4.1%.
Ouch.
The S&P 500, still off 13.03% from its October 2007 high, would have been more than two percentage points lower without Apple.
And year-to-date, the tech sector’s return is nearly 19% higher due to the Big A, says Silverblatt. The S&P 500 is more than 7% higher.
As jawdropping as this outsized impact is, it’s not without precedent.
In the early 1980s, International Business Machines .bgChannel, .bgRealtimeChannel, .bgRevision { display: none; } /quotes/zigman/230066 /quotes/nls/ibm IBM — a leader of a very different tech cycle — also left Yeti-sized footprints over the index.
From September 1981 to September 1983, IBM gained 134% before dividends. The stock’s gains added almost $44 billion to the index, which had about a $1 trillion value at the time, notes Silverblatt.
In fact, IBM ended the period with the largest issue representation in the index, at 6.3%. That’s still a record held by Big Blue. Apple, as the index’s top dog, just represents 3.8% of the index.
– Laura Mandaro
Follow The Tell blog on Twitter @thetellblog
Follow me on Twitter @lauramandaro
The Tell is MarketWatch's fast and engaging look at trends and themes in the day's markets. Drawing on our reporters, analysts and commentators around the world, as well as selecting the best of the rest online, The Tell is all about the pulse of the markets through news, insight and strategic information to help you make the best investing decisions. Got a tip? Tell us at TheTell@MarketWatch.com
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