In the Dow’s elite club, Apple is in and AT&T is out.
Apple will replace AT&T in the Dow Jones industrial average after the close of trading on Wednesday, March 18, the managers of the index announced early Friday. Apple will start trading as part of the 30-stock Dow at the opening of trading the next day.
S&P Dow Jones Indices said it’s making the move in response to a planned stock split for Visa, another member of the 119-year old barometer of the stock market. After its four-to-one stock split, Visa will wind up with a lower price. S&P said that would reduce the weight of the information technology sector in the Dow, because Visa, a credit-card and payment-processing giant, counts as a tech stock. Adding Apple will help balance out this reduction.
The last big Dow shake-up came in September, 2013 when Goldman Sachs, Nike and Visa knocked out Alcoa, Bank of America and Hewlett-Packard.
Unlike other stock-market measures, the Dow weighs members by their prices, so a large change in the price of one stock can have a big effect on the overall index.
S&P said swapping Apple for AT&T won’t alter the Dow’s level.
At $736 billion, Apple is the world’s largest company by market value, but the Dow only accounts for a stock’s price.
AT&T, meanwhile, has bounced in and out of the blue chip average over the Dow’s long history. It first entered in 1916 as American Telephone & Telegraph, joining Central Leather, Studebaker and other industrial giants in an elite club of 20 companies. In recent times, AT&T was kicked out in 2004 only to return the following year when it merged with SBC Communications.
Apple’s stock rose $2.44, or 2 percent, to $128.79 on Friday. AT&T sank 46 cents, or 1 percent, to $33.54.