S&P 500 Moves Toward 3,000

By Douglas A. McIntyre Updated Jan 11, 6:48PM EST · Published Aug 27, 6:15AM EDT

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S&P 500 Moves Toward 3,000 — © Thinkstock

As part of the run-up of the major U.S. stock indices, the value of the S&P 500 has reached a record 2,874. If stocks continue to rally, it should reach the magic 3,000 market by year’s end.

A further run will require sharp improvement of the value of several tech shares that make up much of the value of the index, on a weighted basis. First among these is Apple, followed by Microsoft, Amazon and Facebook. Two non-tech stocks make up the balance of the companies with high S&P 500 rankings: Berkshire Hathaway and JPMorgan.

Of the four big tech stocks, only Facebook Inc. (NASDAQ: FB) is in trouble with investors. Concerns about privacy and the effect Facebook’s effort to address this may have on its ad business have worried investors. The huge social media company also may have helped outsiders affect U.S. elections. Facebook’s shares have sold off over the past three weeks, taking their value down 6%. The company has no ready argument that it can both calm the concerns of its members and potential erosion of its fast-growing revenue.

Apple Inc. (NASDAQ: AAPL), Microsoft Corp. (NASDAQ: MSFT) and Amazon.com Inc. (NASDAQ: AMZN) investors have reason to believe that improvement in their share prices will continue. Evidence of Amazon’s dominance of the e-commerce market and its successful Prime program’s growth jump with each new earnings announcement. Its cloud business holds the top market share among all providers of the services.

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Microsoft also has shown its cloud business holds a large share of the market, and its traditional software business continues to dominate computer and server operating software.

Optimism about Apple has shifted in part from iPhone sales to its growing services business. In the most recent quarter, revenue from this division of Apple was $9.5 billion of Apple’s total $53.3 billion total.

Unless outside forces such as a trade war dent the overall market, an S&P break above 3,000 is very likely.

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About the Author Douglas A. McIntyre →

Douglas A. McIntyre is the co-founder, chief executive officer and editor in chief of 24/7 Wall St. and 24/7 Tempo. He has held these jobs since 2006.

McIntyre has written thousands of articles for 24/7 Wall St. He is an expert on corporate finance, the automotive industry, media companies and international finance. He has edited articles on national demographics, sports, personal income and travel.

His work has been quoted or mentioned in The New York Times, The Wall Street Journal, Los Angeles Times, The Washington Post, NBC News, Time, The New Yorker, HuffPost USA Today, Business Insider, Yahoo, AOL, MarketWatch, The Atlantic, Bloomberg, New York Post, Chicago Tribune, Forbes, The Guardian and many other major publications. McIntyre has been a guest on CNBC, the BBC and television and radio stations across the country.

A magna cum laude graduate of Harvard College, McIntyre also was president of The Harvard Advocate. Founded in 1866, the Advocate is the oldest college publication in the United States.

TheStreet.com, Comps.com and Edgar Online are some of the public companies for which McIntyre served on the board of directors. He was a Vicinity Corporation board member when the company was sold to Microsoft in 2002. He served on the audit committees of some of these companies.

McIntyre has been the CEO of FutureSource, a provider of trading terminals and news to commodities and futures traders. He was president of Switchboard, the online phone directory company. He served as chairman and CEO of On2 Technologies, the video compression company that provided video compression software for Adobe’s Flash. Google bought On2 in 2009.