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S&P 500: The Apple effect

September 21, 2012: 2:11 PM ET

Apple's stock has boosted the 2012 rally, and iPhone 5 sales should help overall corporate profits surge.

Investors might want to stop and thank the iPhone 5's clamoring herds for a boost to their stock portfolio this year.

Shares of Apple (AAPL) have surged 74% this year, helping the S&P 500 (SPX) log a respectable 16% increase. Take Apple out of the mix and the broad index would only have gained 14%, according to research from S&P/Dow Jones Indices.

Apple accounts for nearly 5% of the market cap of all 500 companies in the benchmark S&P index, and helped give the tech-heavy Nasdaq (COMP) a solid boost this year (it's up 22.5%).

Meanwhile, the Dow Jones industrial average (INDU), which doesn't count Apple among its 30 components, is up only 11%.

Related: iPhone 5 Frenzy

The iPhone frenzy will not only boost Apple's bottom line, but it is expected to contribute to 3.6% of all corporate earnings in the third quarter, according to FactSet research. However, that's less than the fourth quarter of 2011, when Apple's earnings accounted for nearly 6% of all corporate profits.

An even more extreme illustration of Apple's heft: it's helped the technology portion of the S&P 500 soar 23.5% from the start of the year. Taking Apple out of the equation, the tech sector would only have gained 13%, noted Howard Silverblatt, senior index analyst at S&P/Dow Jones Indices.

It's of course both exhilarating and dangerous to be on top.

Apple has accounted for more than 4% of the market cap of S&P 500 firms since February.

Only four other companies -- Cisco (CSCO), Microsoft (MSFT), General Electric (GE), and Exxon Mobil (XOM) -- have ever been in that position, according to Leuthold Weeden Capital Management. None were able to stay above that level for more than 15 months.

For the broader market and for investors, it's scary to think of a market where Apple doesn't continue its unfettered growth.

According to Citigroup's equity strategist, Tobias Levkovich, Apple was the number one holding of the largest mutual funds and the largest hedge funds in the second quarter.

The joke in the hedge fund world goes something like: What's the difference between a top-performing hedge fund and a poor performing one? Its Apple's stake.

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Maureen Farrell
Maureen Farrell
Staff writer, CNNMoney

Maureen Farrell is a staff writer at CNNMoney and covers Wall Street, banking, mergers and the stock and bond markets. Prior to joining CNNMoney, she covered venture capital and entrepreneurs for Forbes, and mergers and bankruptcy for Mergermarket and Debtwire, both divisions of the Financial Times.

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