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.