Apple is an S&P Monster

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In recent years, the Apple (NASDAQ:AAPL) effect has often been blamed for the widely differing performances of the S&P 500 and the Dow Jones Industrial Average. The iPhone maker is not part of the latter, but makes a tremendous difference to the fortunes of the former because of its large hold on the index.

The impact was highlighted even more starkly in Monday’s report by Morgan Stanley analyst Adam Parker, which put Apple in a group of just four companies that provide more than half of overall earnings growth among large-capital firms in the S&P 500. Those four companies were Apple, AIG (NYSE:AIG), Goldman Sachs (NYSE:GS), and Bank of America (NYSE:BAC), with the iPhone maker unsurprisingly contributing the most individually at almost 20 percent. The trend was also reflected in the four companies’ stock prices, which have gained 45 percent for Apple, 77 percent for Bank of America, 42 percent for AIG, and 33 percent for Goldman Sachs this year.

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In addition, about 88 percent of the earnings growth among S&P 500 companies this year came from the top 10 companies, six of which were financial services firms. Wells Fargo (NYSE:WFC), JPMorgan Chase (NYSE:JPM), Citigroup (NYSE:C), General Electric (NYSE:GE), Western Digital (NYSE:WDC), and IBM (NYSE:IBM) complete the top-ten lineup.

The study does forecast the sources of growth to be much more diversified in the coming year, with the top 10 names driving 34 percent of growth. But the impact of the current big players is not dropping anytime soon. “Notably, Apple, Bank of America, Microsoft (NASDAQ:MSFT), GE, and Google (NASDAQ:GOOG) are forecasted to be one-quarter of the entire S&P500’s earnings growth in 2013,” Parker added.

While general investors generally use the S&P as the performance benchmark, the media and main street investors reference the Dow much more widely.

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