Apple's Stock And Its Importance In The Market - Part II

| About: Apple Inc. (AAPL)

On Monday, in "Apple's Stock And Its Importance In The Market," I discussed the unusually large influence Apple (NASDAQ:AAPL) has and will likely continue to have for quite some time in the stock market. From its widespread ownership among hedge funds to its number one weightings in the S&P 500 (NYSEARCA:SPY) and Nasdaq 100 (NASDAQ:QQQ), Apple's stock is one that every investor should keep an eye on, regardless of whether he or she owns it.

Wednesday's massive reversal in Apple's stock, from a new all-time high of $526.29 to its close of $497.67, provided the opportunity for investors to see just how important this stock is. Earlier in the trading day, the Nasdaq was up nearly 1% (the QQQ was up a bit more than 1%) and Apple's stock was riding high, setting new all-time highs by the minute. Despite the fact that advancers to decliners and advancing volume to declining volume was less than impressive on the NYSE, at the Nasdaq it was a different story with advancers and advancing volume outpacing decliners and declining volume.

Then the clock struck noon Eastern and everything changed. Apple's stock began a descent that took it down more than 5.5% from its high. Moreover, the descent was on very large volume. For the day, Apple closed lower by 2.31% on 53.5 million shares. Today's volume was roughly 3.66 times its 90-day average of 14.6 million shares. By the end of the day, the Nasdaq too was in the red, decliners outpaced advancers by 1.73 to 1, and declining volume had overtaken advancing volume. Not surprisingly, both QQQ and the Nasdaq reached their highs for the day right at 11:59 am, the exact same minute as Apple. By comparison, Microsoft (NASDAQ:MSFT), the number two weighted stock in the Nasdaq 100, reached its high for the day at 9:48 am and had already begun its afternoon downtrend thirteen minutes before Apple, QQQ, and the Nasdaq topped out.

Google (NASDAQ:GOOG), the number three weighted stock in the Nasdaq 100 reached its high of the day at 9:30 am. Oracle (NASDAQ:ORCL) and Intel (NASDAQ:INTC), numbers four and five respectively in terms of weighting in the Nasdaq 100, topped out for the day at 10:49 am and 9:30 am respectively. Oracle did manage to revisit its high of the day again at 12:24 pm before beginning to fall. Cisco (NASDAQ:CSCO), the sixth largest weighting, topped out at 11:05 am, Qualcomm (NASDAQ:QCOM), the seventh largest weighting, topped out at 11:52 am, and (NASDAQ:AMZN), the eighth largest weight, topped out at 9:30 am. Together, the second through eighth largest weighted companies in the Nasdaq 100 have a combined 34.93% weighting in the index, versus Apple's 16.74% weighting. Yet, rather than reaching its peak earlier in the day with seven of the eight largest weightings, the index instead topped out at the exact same minute as Apple.

If you are interested in reading more about Apple's stock and its role in the stock market, please read my article Apple's Stock And Its Importance In The Market, linked above.

Disclosure: I am long CSCO, INTC.