Apple Inc, the world’s largest company by market value, will join America’s most prestigious share index, the Dow Jones Industrial Exchange replacing AT&T.
Although the move is unlikely to affect the fortunes of the two companies, it is seen by experts as recognition of the evolution of technology and communication in the past decade or so.
The 30-member index, after the inclusion of Apple, will now have six technology related companies with Apple joining IBM corp., Microsoft, visa Inc, Cisco Systems and Intel Corp.
“The Dow is supposed to be the dominant companies in each different sector of the economy and I don’t think anybody can argue that Apple isn’t by far the dominator in the phone sector,” Michael Chadwick, who manages $150 million as chief executive officer of Chadwick Financial Advisors in Unionville, Connecticut, told Bloomberg on a phone interview.
“The digital age is taking over. It’s going to be a function of those who can adapt and change.”
This move was also enabled by Apple’s seven-for-one stock split last year in June.
The addition effectively ends a long period of anxiety for apple investors and shareholders who have at times questioned decisions by the committee to add other companies despite Apple being the top company globally in terms of market value and profitability.
According to the BBC, the company’s stock has been one of the most recognizable and best performing over the years with price gains and dividend payments amounting to up to 36% over the last ten years.
“As the largest corporation in the world and a leader in technology, Apple is the clear choice for the Dow Jones Industrial Average,” said David Blitzer, chairman of the Index Committee at S&P Dow Jones Indices.
After the announcement by the Index committee, Apple jumped $2.55 or 2% in Friday trading to $128.99 while AT&T slipped 46 cents or 1.5% to close at $33.54.
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