Apple, the company with an unmatchable market value, will be added to the iconic Dow Jones Industrial Average stock index from 19 March.
With an additional entry to the Dow stock index, AT&T will have to accept a departure from the list. AT&T first joined the US stock market barometer in 1916, and this departure will mark a major dent for the company.
Apple had been excluded from the list till now, as its high stock price would have distorted the price-weighted index. What has made possible for the Cupertino giant to make an entrance is the change in the structure of Visa shares, which lies in the same sector.
David Blitzer, managing director and chairman of the Index Committee at S&P Dow Jones Indices said-
As the largest corporation in the world and a leader in technology, Apple is the clear choice for the Dow Jones industrial average.
Following the announcement, Apple shares were up $1.65 to close at $128.06 and shares of AT&T were down by 62 cents to $33.38. From 18 March, Visa shares will be split four-for-one, which reduces the weighting of the information technology sector in the overall index.
The Dow Jones Industrial Average is calculated by taking the sum of the share prices of its 30 stocks and dividing the total by a number known as the Dow Divisor. The divisor is continually adjusted to accommodate structural changes to companies and to maintain continuity.