NEW YORK — Apple Inc will be added to the Dow Jones Industrial Average, replacing the telecom giant AT&T Inc, in the first reshuffle of the blue-chip stock index since September 2013.
The changes will push the number of technology-related companies in the 30-member gauge to six and boost their influence even more.
Apple, now the world’s largest company by market capitalisation, will join existing tech heavyweights Microsoft, Intel, IBM and Cisco Systems on an index that not long ago was dominated by heavy industries, oil companies and banks. AT&T is being kicked out after falling 4.5% in 2014. The changes will take effect with the start of trading on March 19.
Stocks in the price-weighted index are selected by a committee of Wall Street Journal and S&P Dow Jones Indices representatives based not on quantitative rules but on the companies’ reputation, relevance to investors and growth record.
For the sake of continuity, changes to the Dow membership are infrequent and often involve more than one company at a time, according to Dow’s guidelines.
The Dow average’s price-weighted methodology, which links a stock’s influence to its price per share, had long barred Apple from joining the gauge.
The iPhone maker’s seven-for-one stock split last year, the first in nine years, alleviated some concern that the company’s $525 stock price would dominate the Dow measure.