US technology giant Apple is to join the Dow Jones industrial average, reflecting the firm's position in the national economy and society. The iPhone maker will replace telecommunications company AT&T.
S&P Dow Jones Indices announced Friday in New York that the largest US company by market value, Apple, would be incorporated in the Dow Jones industrial average, which is a weighted average of the values of 30 major American corporations. Apple will join the index on March 19.
Since by tradition, only 30 companies are included in the Dow, a company needed to be dropped from the Dow to make room for Apple. That company was AT&T, which had been part of the Dow for the better part of a century.
The replacement is widely seen as recognition of the way in which communications and technology have evolved over the last decades.
"This is a sign of the times, and it might get everyone to look at the Dow more than they have been," Philadelphia Trust Co. investment officer Richard Sichel said in a statement.
Past its prime?
Apple boasts a market capitalization of $736 billion (677 billion euros) and will be by far the highest-valued publicly traded company in the index. The second biggest, ExxonMobil has a stock market capitalization of less than half that size, at $$360 billion.
The consumer electronics firm's promotion has been widely expected since Apple split its shares at a seven-for-one rate in mid-2014.
Prior to that, the company had been excluded because its share value was simply too high for the price-weighted index.
The departure of AT&T from the Dow Jones index leaves Verizon as the sole telecommunications firm in the list.
Firsthand Capital Management investment officer Kevin Landis called the Dow "a backward-looking index," adding he cringed when Intel and Microsoft were added.
"I'm cringing today; let's hope Apple can defy the forces of history."
hg/nz (Reuters, dpa, AFP)