The S&P 500 reached an all-time high of 2,130.82 on May 21, 2015. As it approaches the anniversary of the peak, it may well surpass it.
The S&P 500 currently sits at 2,015.93. Its trajectory has been largely higher since the recent trough of February. For the index to move toward a new record, the prices of some of the largest components will need to make most of the momentum.
Surprisingly, tech may not be the primary engine of the rise. Only three of the largest components are tech companies: Apple Inc. (NASDAQ: AAPL), Microsoft Corp. (NASDAQ: MSFT) and Facebook Inc. (NASDAQ: FB). Facebook and Microsoft have become favorites of investors. Apple has not, so the leading component of the index may be the worst enemy of a sharp improvement.
Another drag has been the shares of Exxon Mobil Corp. (NYSE: XOM), the world’s largest oil company, which have been hammered by the recent crude price crater. However, as oil appears to be recovering, the fate of Exxon may improve. The two conglomerates on the list, General Electric Co. (NYSE: GE) and Berkshire Hathaway Inc. (NYSE: BRK-B), have been in favor among investors. Johnson & Johnson (NYSE: JNJ) and Procter & Gamble Co. (NYSE: PG) have not had explosive share prices, nor have their shares collapsed. AT&T Inc. (NYSE: T) shares have not been on fire, but they get a boost because of its high dividend and strength of its fiber to the home and cellular businesses. The final of the top 10 stocks in the index is Wells Fargo & Co. (NYSE: WFC). Due to problems with loan portfolios, including ones that include energy paper, banks have been out of favor.
Short term, Exxon and Apple will need to draw investors. If they can, the S&P 500 may pass its former record.
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