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Apple Joins Dow Jones Industrial Average, Replacing AT&T

Strategic Insights

— 1 min read

Apple, the world's biggest company by market value, will join the Dow Jones Industrial Average later this month, marking a significant milestone in the company's growth. The iPhone maker will replace AT&T, which has been in the Dow for almost 100 years, in the index's first reshuffle for 18 months. This move comes as Apple is set to unveil its Apple Watch at an event in San Francisco on Monday.

Key Takeaways:

  • Apple will sit alongside Microsoft and Intel, two other technology companies, in the Dow Jones Industrial Average, demonstrating the increasing dominance of tech companies in the US.
  • Apple's entry into the Dow was delayed due to concerns that its high share price would distort the 30-company index, but a seven-for-one share split last year alleviated these concerns.
  • The Dow's price-weighted system, which links a company's influence on the index to its share price, has been criticized for being out of date and not accurately representing the US economy.
  • Apple's market value is over $730bn, making it the largest corporation in the world, and it has surpassed AT&T in terms of market value, which was previously the largest company in the Dow.
  • According to analyst Laith Khalaf, Apple's entry into the Dow may lead to a short-term rise in its shares, but the effect is typically short-lived.
  • The Dow Jones Industrial Average, which was introduced in 1896, has been criticized for being arbitrarily selected and unrepresentative of the US economy.

Statistics:

  • Apple will join the Dow Jones Industrial Average on March 18, replacing AT&T.
  • Apple's market value is over $730bn, making it the largest corporation in the world.
  • The Dow Jones Industrial Average has 30 companies, with Apple set to join alongside Microsoft and Intel.
  • The Dow's price-weighted system has been criticized for being out of date and not accurately representing the US economy.
  • Apple's shares rose as much as 2.2% to $129.22 on Friday.

Sources:

  • S&P Dow Jones Indices
  • Wall Street Journal
  • Apple
  • Hargreaves Lansdown
  • FTSE 100

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