Apple briefly passes Exxon as largest U.S. company
SAN FRANCISCO/NEW YORK
SAN FRANCISCO/NEW YORK (Reuters) - Apple Inc briefly edged past Exxon Mobil Corp to become the most valuable U.S. company on Tuesday, displacing an old economy stalwart and heralding an era where technology holds sway.
Although Apple slipped back to the No. 2 spot after the close, market watchers said it is simply a matter of time before the company that defined the smartphone and tablet markets with the iPhone and iPad ascends the top.
The technology giant's market value rose on Tuesday to $341.5 billion in severely choppy afternoon trading, just above Exxon's $341.4 billion, even though the oil major's annual revenue is four times that of Apple's.
Exxon quickly regained the No. 1 spot as its shares rose and Apple's shed some of their gains, with stocks globally remaining volatile because of soft economic data and the downgrading of the United States' sovereign credit on Friday.
Exxon ended on Tuesday with a market cap of $348.3 billion followed by Apple at $346.7 billion.
The potential changing of the guard, which is largely symbolic, reflects the influence and power of certain industries over the U.S. economy in different points in time.
"Technology is what people understand now," said Robert Pavlik, chief market strategist at Banyan Partners. "At some point it used to be the radio, before that it was trains. So I think it's sort of indicative of our society."
Tuesday's move by Apple, which for a short time ended Exxon Mobil's run of more than five years at the top, capped a remarkable turnaround for a company that once teetered on the brink before Apple CEO Steve Jobs returned to resuscitate the enterprise he co-founded.
Thirteen years ago, some analysts said Apple's value consisted of real estate holdings and cash on hand.
Apple joined, albeit briefly, a group of nine companies that have held the top spot in the S&P 500, including General Electric Co, General Motors, IBM Corp, Microsoft Corp and AT&T Inc, DuPont, Philip Morris Cos and Wal-Mart Stores Inc, according to Standard & Poor's Index Analytics.
Apple will officially become the 10th member of that group only if its market cap at the close of trading is higher than Exxon's, said Howard Silverblatt, senior index analyst at S&P Indices.
The Silicon Valley icon, which was included in the S&P 500 index in 1982, has clawed its way to the top of the chart from the 287th position it held 10 years ago, he added.
RIDING THE MOBILE WAVE
Exxon became the most valuable U.S. company in 2006 on the back of higher oil and gas prices, while GE got top valuation when heavy equipment, energy, military contracts and finance represented a large portion of the U.S. economy.
GM, which went bankrupt in 2009 and is now back in the market through a new initial public offering, topped the list when automobile manufacturing was biggest symbol of American industrial power.
Apple is riding the mobile wave that has swept up consumers worldwide. Since Jobs' return, the company has cranked out a string of now-iconic, category-defining products, from the Mac and the iPod music player to the iPhone and now the iPad, which almost single handedly created the tablet computer market.
Apple now demands a position in virtually every long-term investor's portfolio on the strength of its deft handling of overseas production and supply, as well as perceptions of an unerring antenna for consumer tastes.
Since July 1, Apple's market capitalization has risen by more than $20 billion, fueled by optimism a new version of its best-selling iPhone will lead to a monstrous second half of 2011.
Exxon's market cap, on the other hand, has slipped about $50 billion in the same period due to volatile crude oil prices.
But many on Wall Street are concerned about Jobs' ailing health and fear the company will not be the same without its hard-driving, visionary leader. Others are worried about the rising popularity of Google-powered smartphones.
The two companies, however, have little in common for investors. Exxon pays a regular quarterly dividend, while the last dividend paid by Apple was in November 1995. Also, Exxon spends billions to buy back its own shares each quarter.
(Additional reporting by Anna Driver in Houston; editing by Steve Orlofsky and Andre Grenon)
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