On Friday, Financial Times explained that nine giant companies are propping up the S&P 500 this year. The nine stocks are Google (GOOG), Microsoft (MSFT), Amazon (AMZN), Facebook (FB), Netflix (NFLX), Priceline (PCLN), eBay (EBAY), Starbucks (SBUX), and Salesforce (CRM). Investment research firm Ned Davis calls them the “Nifty Nine”.
If the Nifty Nine were an index, it would be up 60% on the year, according to Financial Timesresearch.
The Nifty Nine is propping up the rest of the market. That’s because the S&P 500 is weighted by company size. Bigger companies influence its performance more than smaller companies.
For example, Google is the second-largest company in the S&P 500. It’s up 43% on the year. Amazon is the sixth-largest company. It’s up 117%. Facebook is the eighth-largest. It’s up 35%.
However, the median S&P 500 stock is down 12% from its 52-week high, according to Business Insider.
• In a healthy bull market, a large percentage of stocks “participate” in the rally…
Today, the number of rising stocks is dwindling. Just a few large companies are propping up the market.
On average, stocks in the Nifty Nine trade at a 746% premium to the S&P 500...