FLASH: Apple to replace AT&T (T) in DJIA

FLASH: Apple [AAPL] to replace AT&T (T) in DJIA

Tech giant’s earlier stock split, plus Visa’s (V) upcoming split paved the way for this long-anticipated move. Likely to roil averages in current trading.

Apple logo and money.
The color of money is whatever Apple says it is. Composite image by the author, derived from public domain graphics.

WASHINGTON, March 6, 2015 – In a long-anticipated move, technology mega-giant Apple (AAPL) will be added to the Dow Jones Industrial Average (DJIA) after the close of trading on March 18. Apple will replace AT&T in the average, according to a statement from Dow Jones, and will be factored into the index at market open on the morning of March 19.

The effective date was chosen, according to sources, because fellow DJIA member Visa (V) will effect its already announced 4-for-1 split at the same time

In a press release from the index committee of S&P Dow Jones Indices, managing director and committee chair David Blitzer observed, “The DJIA is price weighted so extremely high stock prices tend to distort the index while very low stock prices have little impact.”

For that reason, he continued, “Apple’s 7-for-1 stock split “brought the stock price down closer to the median price in the DJIA. The Visa split will reduce the technology weight in the DJIA and make room for Apple. Among the current DJIA constituents, AT&T has one of the lowest prices.”

In pre-market trading action, AAPL popped approximately 2 percent, but has backed off somewhat. The market itself is likely to open down this morning, due to surprisingly adverse sentiment concerning this morning’s positive employment numbers. Apple rose as much as 2 percent in premarket trading before retreating slightly.

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Terry Ponick
Biographical Note: Dateline Award-winning music and theater critic for The Connection Newspapers and the Reston-Fairfax Times, Terry was the music critic for the Washington Times print edition (1994-2010) and online Communities (2010-2014). Since 2014, he has been the Business and Entertainment Editor for Communities Digital News (CDN). A former stockbroker and a writer and editor with many interests, he served as editor under contract from the White House Office of Science and Technology Policy (OSTP) and continues to write on science and business topics. He is a graduate of Georgetown University (BA, MA) and the University of South Carolina where he was awarded a Ph.D. in English and American Literature and co-founded one of the earliest Writing Labs in the country. Twitter: @terryp17