Home Stock Market Here's how important Apple is to the whole stock market as its earnings report nears

Here's how important Apple is to the whole stock market as its earnings report nears

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There may be one thing missing for the stock market to rally — Apple.

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The world’s most valuable company is a key name in all the major benchmark indexes. Apple’s shares constitute a 4.7 percent weighting in the Dow Jones industrial average and 11.1 percent in the Nasdaq 100, according to FactSet. The company also represents 3.8 percent of the SPDR S&P 500 ETF, the largest weighting in the security that tracks the S&P 500 index.

Using Kensho, a quantitative tool used by hedge funds, CNBC ran a study to find out how correlated Apple is with the stock market indexes over the past three months.

Apple’s correlation with the S&P 500 is 0.78 and 0.76 with the Dow Jones industrial average. A correlation of 1 would mean the two move in perfect lockstep.

The markets’ exposure to Apple shares isn’t helping lately. The tech giant’s stock declined 9 percent since its March 12 close versus the S&P 500’s 5 percent drop through Monday as investors grew worried over future iPhone demand.

With the company’s fiscal second-quarter results after the market close Tuesday, the next big move for the stock market may be determined by how well Apple does.

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