Lucy Nicholson | Reuters
A customer holds up his new iPhone 6 Plus in Pasadena, Calif.
Tech giant Apple is joining the Dow Jones Industrial Average, replacing AT&T, according to Dow Jones.
The change is expected to take place after the market close on March 18. The change will be effective with the opening of trading on Thursday, March 19. The index change was prompted by Visa 4-for-1 stock split which is scheduled to be effective at the same time.
"The DJIA is price weighted so extremely high stock prices tend to distort the index while very low stock prices have little impact," said David Blitzer, managing director and chairman of the index committee at S&P Dow Jones Indices in a press release. "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. Among the current DJIA constituents, AT&T has one of the lowest prices."
Apple announced its 7-for-1 stock split last June.
Apple shares rose as much as 2 percent in premarket trading before retreating slightly. AT&T shares declined more than 1 percent.
As of Thursday's close, the split, combined with the membership change will reduce Visa's position in the Dow from first to 21st, reducing its weighting percentage on the blue-chip index to 2.53 percent from 9.71 percent, according to Howard Silverblatt, senior analyst of S&P Dow Jones Indices.
Apple will account for 4.66 percent of the index, he added.
The change is expected to take place after the market close on March 18. The change will be effective with the opening of trading on Thursday, March 19. The index change was prompted by Visa 4-for-1 stock split which is scheduled to be effective at the same time.
"The DJIA is price weighted so extremely high stock prices tend to distort the index while very low stock prices have little impact," said David Blitzer, managing director and chairman of the index committee at S&P Dow Jones Indices in a press release. "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. Among the current DJIA constituents, AT&T has one of the lowest prices."
Apple announced its 7-for-1 stock split last June.
Apple shares rose as much as 2 percent in premarket trading before retreating slightly. AT&T shares declined more than 1 percent.
As of Thursday's close, the split, combined with the membership change will reduce Visa's position in the Dow from first to 21st, reducing its weighting percentage on the blue-chip index to 2.53 percent from 9.71 percent, according to Howard Silverblatt, senior analyst of S&P Dow Jones Indices.
Apple will account for 4.66 percent of the index, he added.
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