Changing Breadth of the Market

Chart of the Week for September 3-9, 1999

Over the course of a year it is interesting to dissect an entire Index and review the breadth of the securities within its portfolio. Once again we see how just one-third of the stocks held in the S&P 500 can drive the entire Index. Over the past twelve months, the capitalization-weighted S&P 500 has returned 39.8%. However, when looking at each individual security on an equal weighted basis, the portfolio would have returned 34.4%.

As can be seen on the chart above, a significant portion of the Index gains could be attributed to eleven stocks which exceeded gains of 200%. One stock in particular, Qualcomm, Inc. has soared 609% over the past twelve months.

Compared to statistics from six months ago: the S&P 500 Index had a capitalization-weighted return of 19.7% for the 12 months ending 2/28/99. The equal-weighted return for the same time period was 4.4%. Over the past six months, the dispersion of Index component performance has narrowed.

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