Apple to replace AT&T in the Dow Jones Industrial Average CNBC.com staff | @cnbc 1 Min AgoBreaking News COMMENTSStart the Discussion They are really taking a chance hoping apple gets to that trillion dollar market soon..... yes apple has upside but I believe this story is a little to late, this should have been done years ago when Intel and msft were placed in the dow..... 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 [ V 274.13 +0.00 (+0.00%) ] 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, when it enters the index, will have the fifth-biggest weighting due to price alone. But it's the second-most volatile stock, so on a volatility-adjusted basis, it will be the second-most impactful stock in the Dow. The three stocks with higher share prices than Apple are IBM, Boeingand 3M. Each of them have very low volatility, hence their impact on the index will be quite muted, despite the nominal value of their high price leading to a heavy weight in the index. So this new Dow 30 will really just be Goldman Sachs, Apple and 28 other stocks. http://www.cnbc.com/id/102484101
Put AAPL in the DOW after a hystoric decade plus long run to becoming the largest market cap on earth. Mom and Pop market indexers can now enjoy AAPL's struggle to hopefully double their market cap to 1.5 trillion dollars. and the Wall St. Scam continues...
They want the dow at 20k. If they keep taking lower priced stocks out and adding higher price stocks (since the dow is price weighted), then we'll see dow 20k and higher if AAPL keeps having blowout quarterly results.
They held out on putting apple in due to share price. Aside from that how much growth is left in apple...law of numbers will show that apple will start to struggle...how many upgrade cycles can one push...unless im wrong there will be a peak for apple sooner than later...I think they know that with news out last week about apple creating a car by 2020. Every company always peaks and apple will do the same. I think the addition to the Dow 30 is a little to late...hundreds of billions in market cap added the last decade and now they decide to add another tech company to the Dow...maybe they should take Verizon out and push Amazon or Google in there once they split their shares.
1) Sounds like a wonderful sell-signal to me! 2) This "fruit" has worms in it. :eek: 3) Next stop? ...... $59.99/share. We'll see. [/quote]