Apple Inc. will replace AT&T on the Dow Jones Industrial Average at the opening bell March 19, Dow Jones announced Friday. The move was made possible after Visa Inc. announced in January a 4-for-1 stock split, which lowered the value of its shares and helped make room on the U.S. index of 30 large American companies.
“The DJIA is price-weighted so extremely high stock prices tend to distort the index while very low stock prices have little impact,” David M. Blitzer, managing director and chairman of the Index Committee at S&P Dow Jones Indices, said in a Friday morning statement before markets opened in New York. “Apple's 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.”
Apple, based in Cupertino, California, offered a 7-to-1 stock split on June 9, its largest ever. The split bought down the price of a share from nearly $700 to around $100. AT&T, the telecom giant based in Dallas, has one of the lowest stock prices on the index so it was selected for removal in order to make room for the maker of the iPad and iPhone.
The DJIA was last adjusted in September 2013 when investment bank Goldman Sachs Group Inc., Visa and Nike replaced Alcoa Inc., Bank of America and Hewlett-Packard.
Apple shares were up 1.14 percent to $127.85 in early-morning trading. AT&T stock was down 1.18 percent to $33.60 after the announcement.