Apple’s value may surpass Exxon’s

Associated Press

NEW YORK

Here’s something to think about the next time you pick up a call on your iPhone: The device you’re holding may soon be the signature product of the most valuable company in the world.

Thanks to its line of gadgets that combine the ability to make calls, send e-mail, read books, watch movies and listen to music, Apple Inc. is on a path to overtake Exxon Mobil Corp. as the largest company by market capitalization.

Though Apple CEO Steve Jobs no doubt will be happy about his new perch atop the business world, there’s more at stake here than mere bragging rights. As soon as the total value of the company’s shares edges above Exxon’s, Apple will take over the top spot in the Standard & Poor’s 500, the market index used by most professional money managers.

That means that billions of dollars invested in funds that track the index will have to shift their holdings to reflect Apple’s new weighting. Exxon, meanwhile, may see its share price fall from the same effect. That slide could be accelerated by hedge funds and technical traders who make bets based on the rebalancing of major indexes and would be primed to short the shares of Exxon.

The move also will reflect how the market, and the overall economy, continues to evolve.