• Apple's Weighting to Change in Nasdaq Rebalancing

    Next month, the NASDAQ stock exchange will rebalance its benchmark NASDAQ 100. In the process, the exchange will effectively slash Apple Inc's weighting and likely spark no shortage of volatility as traders and investors navigate the upheavals and readjust their stock portfolios.

    Wall Street analysts who have publicly commented on the matter today are correct in saying that the rebalancing of the NASDAQ 100 "is not an unusual event in itself." But plans to cut Apple's portion of the NASDAQ-100 index from 20% all the way 12% is indeed noteworthy, as the weighting of Google and Microsoft will climb as a consequence.

    The rebalancing was driven in part by the seemingly unstoppable rise in Apple shares, which are up more than fourfold in the past two years. The tech company’s big weighting means that a change in fortune for the maker of iPhones, iPods and iPads has a huge impact on one of the most heavily traded indexes in the market.
    The rebalancing takes effect May 2, 2011. It should be noted, however, that many view the upheaval as a potentially strong buying opportunity for shares of Apple. The logic applied in making that assessment, say those who are looking for the positives in the rebalancing, is rooted in the fact that Apple's corporate fundamentals remain very, very strong. And it's going to take a lot more than a NASDAQ shake-up for shares of Apple to ultimately fall short of where many analysts believe they will end up - north of $500 per share.

    On Tuesday at 10:32 am CST, shares of Apple (AAPL) were only down $0.71 to $340.48.

    Source: Wall Street Journal
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