Apple replaces AT&T in the Dow 30, joining America’s most exclusive stock index. Alison Kosik explains why now is the perfect time for Apple.
Apple’s seven-for-one stock split June 2014 qualified the stock’s inclusion in the Dow and put it in line with virtually all of the DJIA eligibility criteria. Apple demonstrated sustained growth, has the interest of a large number of investors, and is a large-cap stock priced similarly to the other Dow 30 components in the price-weighted index.
The Dow is a price-weighted index, which means the price is determined by the price changes of the companies in the index.
A 1% move in Apple’s stock — about $1.28 at Wednesday’s closing price — would move the Dow by about 8.54 points. Apple has nearly five-times the influence compared to the Dow’s lowest component, General Electric stock, GE. Apple’s is the fifth-highest priced Dow component, behind Goldman Sachs Group GS.
In the S&P 500 — a market-capitalization weighted index — Apple ($748.3 billion market cap) has more than twice the influence on the S&P as that of Exxon Mobil Corp.
Apple is the largest company in the United States, with a $736 billion market cap. Apple replaced AT&T in the Dow, which is ironic because AT&T was the first wireless cellphone provider to unveil the Apple iPhone.
VIDEO WAS REMOVED
Apple Co-Founder Ron Wayne: Apple’s move to the Dow is remarkable.
As of Thursday, March 19, 2015 at 12:30 p.m. Yahoo! Finance did not have Apple on the list of Dow components.
Dow Jones Index as of March 18, 2015
The Home Depot
Johnson & Johnson
Procter & Gamble
The first companies in the Dow Jones Industrial Average on May 26, 1896 were all industrial stocks.
American Cotton Oil
Distilling & Cattle Feeding
Tennessee Coal & Iron
U.S. Leather pfd.
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