Silicon Valley, led by Apple, becomes Wall Street's backbone and ATM

The San Jose Mercury reports:

Led by the most successful company in the history of American commerce, Silicon Valley technology firms have become increasingly attuned to the demands of Wall Street, churning out profits at a record pace and sending a fire hose of cash back to investors.

With the 30th annual SV150, this newspaper's ranking of the largest companies in Silicon Valley by revenue, it's clear that Wall Street depends on Silicon Valley tech companies like never before. In 1985, only six companies in the SV150 also had residence in the Standard & Poor's 500 index. Now, 30 companies are shared between the two, information technology is the S&P's biggest sector, and Apple has joined the Dow Jones industrial average for the first time.

Overall, the SV150 produced a profit margin of 16.4 percent amid record sales and profits, but the $134.4 billion that companies pushed back to investors through dividends and stock repurchases was even greater than the profits of nearly $128 billion.

"There's been a change in the valley over the last five to 10 years," said Nick Donatiello, who teaches at Stanford's Graduate School of Business. Fast-growing tech companies once shunned paying dividends, which are traditionally associated with mature industries such as utilities and tobacco. "There was a stigma associated with it."

No longer.

Changes.