Apple to Replace AT&T in Dow Jones Industrial Average on March 18

[MacRumors]

Apple will be joining the Dow Jones Industrial Average, according to S&P Dow Jones (via The Wall Street Journal). Apple will be added to the Dow Jones at the close of trading on March 18, replacing AT&T as one of 30 members on the major price-weighted index. Apple is listed on Nasdaq with a pre-market share price hovering around the $128 mark as of this writing.

"Apple is the clear choice for the Dow Jones Industrial Average, the most recognized stock market measure," says David M. Blitzer, chairman of the Index Committee at S&P Dow Jones Indices.

The addition of Apple on the Dow Jones Industrial Average will occur just weeks after the iPhone maker recorded the most profitable quarter of any company ever, posting record-breaking quarterly revenue of $74.6 billion and quarterly net profit of $18 billion on sales of 74.5 million iPhones during the first quarter of the fiscal year. Apple is currently the world's most valuable company with a market cap exceeding $735 billion.

The Dow Jones Industrial Average provides a price-weighted average of 30 significant stocks traded on the New York Stock Exchange and the Nasdaq, which offers valuable insight into how the stock market is performing at any given time. Other members of the Dow Jones include American Express, Boeing, Chevron, Coca-Cola, Disney, Exxon Mobil, Goldman Sachs, IBM, Intel, JPMorgan and Chase, Microsoft, Verizon and Visa.

Apple has long been an ideal candidate for inclusion in the Dow Jones Industrial Average, although its above-$700 share price before splitting 7-for-1 last year would have inflated the price-weighted index. The stock split brought the price of Apple shares down to around the $100 mark, making it a more suitable option to be included in Dow Jones.

Article Link: Apple to Replace AT&T in Dow Jones Industrial Average on March 18

 

[oatman13]

Well it's about bloody time!

 

[KPOM]

Interesting development. The S&P 500 is more representative of the market, but the Dow has more cachet.

 

[ArtOfWarfare]

They've been one of the most valued companies for quite a while even before becoming the most valued company in the world... interesting it took so long for them to be included in this.

 

[iapplelove]

it's amazing really that all this revenue is from just one product, iPhone. everything else apple does is small change..

 

[andrew0122]

AWESOME!! Congradulations Apple!!!

 

[SpiderDude]

Makes sense

And I do believe it's overdue.
Loving the pre-market bump also.

 

[Mazeman]

Should bump the price even further.

 

[X-X]

They've been one of the most valued companies for quite a while even before becoming the most valued company in the world... interesting it took so long for them to be included in this.

It took the split before this could happen. The value of Apple stock was to high before, way over the average of the DOW.

 

[2457282]

I wonder why they are dumping AT&T, but adding Apple makes good sense. THis is the time to buy as there will be a lot of activity for funds tied to the Dow will add Apple to sync their portfolio. Its also probably time to dump AT&T.

 

[HobeSoundDarryl]

The DOW is supposed to be a representative barometer of the whole stock market based upon a relatively tiny 30-stock basket. I don't see how adding one of the top stocks and top-performing stocks contributes to that generally representative objective. This would be like having rich, old white guys elected to a government as solid representations of all Americans.

Great for AAPL and AAPL shareholders but this looks like choosing bias for the bulls over relevance (representative of the performance of all stocks). Think about it. Do you think AAPL performance remotely mirrors the performance of all stocks? I know Powerball makes a lot more money when the numbers go toward or exceed records. Maybe the DOW is playing a variation of that game? If they would adopt the top 30 best-performing stocks, the index would be likely to run to records year after year. But don't they lose the "representative" aspect at the root of what the DOW is supposed to be?

 

[maflynn]

The DOW is supposed to be a representative barometer of the whole stock market based upon a relatively tiny 30-stock basket

That was the initial intent, but it long ago abandoned that ideal for one that promotes growth to attract businesses. The only reason why Apple is on their is because of the growth and ability to have the Dow break records.

 

[heeloliver]

congrats apple!

 

[Traverse]

it's amazing really that all this revenue is from just one product, iPhone. everything else apple does is small change..

Mmmm, I wouldn't go that far. The iPhone does account for the vast amount of revenue, but according to their most recent annual filing in October 2014 the sales looked roughly like this:

iPhone $101,991
iPad $30,283
Mac $24,074
iPod $2,286
iTunes $18,063
Accessories $6,093

Since non-iPhone products account for $74,706* or roughly 40.9% of their revenue I certainly wouldn't call it a "small change." I would want more portfolio diversity instead of banking nearly 60% on the iPhone, but they can't fully control that.

*Excludes accessories since that might largely be influenced by iPhone sales.

 

[HobeSoundDarryl]

That was the initial intent, but it long ago abandoned that ideal for one that promotes growth to attract businesses. The only reason why Apple is on their is because of the growth and ability to have the Dow break records.

So we have a "representative" barometer of the whole stock market biased to look great and setting up the scenario where the rest of the market could conceptually fall but the DOW implies all is rosy because a 30 "best" stocks are able to perform well even in a bear market.

Again, this is great for AAPL. I'm just poking some fun at the "representative" concept underpinning the point of the DOW index. If it's not representative, then isn't it just an aggressive growth mutual fund that gets a lot of free publicity?

 

[sk1wbw]

I think AT&T got dropped because of that insanely annoying girl in the wireless store commercials.

 

[iapplelove]

Mmmm, I wouldn't go that far. The iPhone does account for the vast amount of revenue, but according to their most recent annual filing in October 2014 the sales looked roughly like this:

iPhone $101,991
iPad $30,283
Mac $24,074
iPod $2,286
iTunes $18,063
Accessories $6,093

Since non-iPhone products account for $74,706* or roughly 40.9% of their revenue I certainly wouldn't call it a "small change." I would want more portfolio diversity instead of banking nearly 60% on the iPhone, but they can't fully control that.

*Excludes accessories since that might largely be influenced by iPhone sales.

small change may be putting it wrong, it's just impressive to me to have one rock solid product,that nails it year in and year out. iPhone revenue is impressive!

 

[HobeSoundDarryl]

Mmmm, I wouldn't go that far. The iPhone does account for the vast amount of revenue, but according to their most recent annual filing in October 2014 the sales looked roughly like this:

iPhone $101,991
iPad $30,283
Mac $24,074
iPod $2,286
iTunes $18,063
Accessories $6,093

Since non-iPhone products account for $74,706* or roughly 40.9% of their revenue I certainly wouldn't call it a "small change." I would want more portfolio diversity instead of banking nearly 60% on the iPhone, but they can't fully control that.

Have no fear:
-the Watch is about to launch,
-a thinner, port-starved Air should bump up the Mac share and
-a much larger iPad should reverse the iPad trend.

All is well. Nothing to see here. These aren't the droids you're looking for.

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I think AT&T got dropped because of that insanely annoying girl in the wireless store commercials.

I thought she was the best part about anything connected to AT&T.

 

[evansls]

Google VP 1: Oh smack, Apple is now part of the DOW average
Google VP 2: What about us?
Google VP 1: How can we copy that one?
Google VP 2: It's an easy fix. One line of dialogue. 'Thank God we invented the... you know, whatever device.' Then we're in!

 

[tjleonard]

small change may be putting it wrong, it's just impressive to me to have one rock solid product,that nails it year in and year out. iPhone revenue is impressive!

Keep in mind that iTunes and Accessories can be from the iPhone as well...

 

[iapplelove]

Keep in mind that iTunes and Accessories can be from the iPhone as well...

The residual iphone revenue is so huge it keeps other small companies in business. Or in some cases out of business.

 

[tokenuser]

it's amazing really that all this revenue is from just one product, iPhone. everything else apple does is small change..

Samsung looks between the seat cushions on its sofa for small change like Apple has ...

 

[JAQ]

it's amazing really that all this revenue is from just one product, iPhone. everything else apple does is small change..

Actually, Apple's income from the iPhone is just over half of the total. The "small change" of iPads, Macs, iTunes content, etc. adds up to a business that would still be large enough to be considered for the DJIA.

 

[groovyd]

ka-ching

 

[Traverse]

I think AT&T got dropped because of that insanely annoying girl in the wireless store commercials.

It's like they were trying to get their own Flo from the Progressive commercials.

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I thought she was the best part about anything connected to AT&T.

Like I said above, she makes me think of Flo from the Progressive ads!

----------

small change may be putting it wrong, it's just impressive to me to have one rock solid product,that nails it year in and year out. iPhone revenue is impressive!

That's true, Apple's sales breakdown is extremely skewed.

I wish Mac sales were higher to give Apple reason to keep putting more into them. They do a good job now, but I think it's more to help promote the Apple ecosystem than to simply promote the Mac.