CNN:
Apple will replace AT&T in the Dow — an exclusive club of 30 stocks that also includes tech giants Microsoft, Intel, and Cisco as well as brand-name consumer firms Walmart, Coca-Cola, and Disney.
“As the largest corporation in the world and a leader in technology. Apple is the clear choice for the Dow Jones Industrial Average,” said David Blitzer, managing director and chairman of the index committee at S&P Dow Jones Indices, in a statement.
Apple will enter the Dow at the close of trading on March 18.
As tha article says, this is mostly symbolic but, for a company on the edge of bankruptcy less than 20 years ago, it’s a remarkable journey.
Apple is not the largest corporation in the world. Just the most valuable. Big difference.
I didn’t read the article, but the first thing I think of here are all of the index funds that track the Dow, and all of the mutual funds that invest in the indexes… this should give Apple a (hopefully stable) share price boost (after the inevitable initial speculation is over…).
I wonder how the Dow is going to compensate for the extreme overweighting Apple will add as it keeps sucking up the worlds cash…
It’s all snake out and goat entail reading anyway. Putting such companies together – Apple and Wal Mart is like mixing Marshmallow Fluff and Moose Head Beer.
That’s the idea… it’s supposed to represent a snapshot of the main players in the major industries that drive the country. They’re not supposed to be similar, just big boys…
The worst thing about the Dow is it’s ridiculous price weighting (as opposed to percentage weighting). Apple would never have gotten in at $700 a share, if they dropped $10 in a day, they’d torpedo the entire average even though it’s a small percent – if a company worth $10 drops $1 it barely moves the needle, even though they just lost 10% of their market value.
Mostly symbolic, but then so are stock splits…
So no one should go to their online stock broker of choice (mine is Capital_One/sharebuilder) & no one should buy Apple stock.
Because, you can & probably will lose money in the stock market, even if you buy Apple stock.