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AAA  Mar. 7, 2013
The new leaders
By STAN CHOE
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The stock market is nearly back to its record high set in October 2007, but it's a different kind of market than it was then.

Today, technology stocks make up the largest of the 10 sectors in Standard & Poor's 500 index — representing 18 percent of the market value of companies in the index.

Apple is worth almost $400 billion and its 20 percent decline this year has weighed down the market. Excluding Apple, the S&P 500 would be up almost 9 percent, a full percentage point more than its current rise, according to S&P Dow Jones Indices.

Back on Oct. 9, 2007, when the S&P 500 set its record high of 1,565, the financial industry was the biggest in the market. It made up 20 percent of the index and included Lehman Brothers. But the collapse of the investment bank, the financial crisis and the increase in government regulations have pummeled the industry. Financial stocks in the S&P 500 have sunk 49.6 percent since Oct. 9, 2007, and they now make up 16 percent of the index.

The change of leadership mirrors their profit performances. Earnings per share for S&P 500 technology stocks have doubled since 2007, according to Goldman Sachs. Profits for financial stocks have dropped 28 percent.

Consumer stocks have also become a bigger piece of the market. Stocks of companies that sell basics and necessities, as well as discretionary items to consumers have posted the biggest gains since 2007. Together, they make up 23 percent of the index, up from 19 percent.

Associated Press
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