Apple (AAPL) To Replace AT&T (T) In Dow Jones Industrial Average

Announced Friday, Apple Inc (AAPL - Analyst Report) will join the exclusive Dow Jones Industrial Average later this month, a stock market index that has only 30 members. Apple will replace telecommunications giant AT&T Inc (T - Analyst Report), according to S&P Dow Jones Indices, the unit of McGraw Hill Financial Inc that owns the Dow. AT&T has been part of the Dow since 1916.

The addition of Apple will not affect the value of the Dow, which has increased 1.8% this year, and has hit over 90 record closes in the past 2 years.

Apple will join the DOW at the end of trading March 18.
 
This shift in DOW elements reflects Apple’s technology influence and leadership. The company’s stock has been one of the market’s titan-like performers in recent years. Their current market value speaks to this fact: Apple is worth nearly $736 billion, almost double that of No. 2 global company Google (GOOG), GOOGL) at $391 billion.
 
“As the largest corporation in the world and a leader in technology, Apple is the clear choice for the Dow Jones Industrial Average,” David M. Blitzer, chairman of the Index Committee at S&P Dow Jones Indices, said in a statement.
 
AT&T is being replaced after falling 4.5% in 2014. This change-up is also due to the upcoming 4-for-1 stock split by Dow member Visa Inc (V - Analyst Report), according to S&P Dow Jones Indices. The split by Visa would sharply decrease the index’s technology weighting—as the Dow is price weighted—if not for the inclusion of Apple.
 
Visa’s split, which will occur at the same time as the addition of Apple to the Dow, stands to reduce the company’s stock price to approx. $68 from its close Thursday of $274.13.
 
The changes will increase the number of tech-related companies in the Dow to 6 as well as foster their influence even more as Apple joins Microsoft Corp (MSFT -Analyst Report), Intel Corp (INTC), International Business Machine (IBM), Cisco Systems Inc (CSCO), and Visa.
 
In early afternoon trading yesterday, Apple was up 0.83% on the day and sits at a Zacks Rank #2 (Buy). AT&T is unsurprisingly was down 1.5% since market opening and rests at a Zacks Rank #3 (Hold).