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The Spokesman-Review Newspaper
Spokane, Washington  Est. May 19, 1883

Dow reshuffle picks Apple, boots AT&T

Associated Press

NEW YORK – Apple is in. AT&T is out.

In another milestone for the popular and profitable iPhone giant, Apple will replace AT&T in the venerable Dow Jones industrial average on March 19, the manager of the index announced Friday.

The move, market experts say, has symbolic importance.

The change cements Apple as “the gold standard of technology,” said Daniel Ives, a financial analyst at FBR Research. “They’ve really become the modern-day Wright Brothers.”

The reshuffling of the 119-year-old Dow, a barometer of market fortune and folly once dominated by railroads, also reflects a changed business world.

“It underscores that technology continues to be a critical driver of the overall economy,” said Edward Jones analyst Bill Kreher.

Apple is the world’s most valuable company. Its market value on the stock exchange, or what it would take to buy all its shares, closed last month above $700 billion, a first for any company.

Apple won’t get top billing in the Dow, though. Thanks to a quirk in the way the index is calculated, that honor will go to a company a little over a tenth as valuable: Goldman Sachs.

The Dow weights companies by how much it costs to buy a single share, not all of them. On Friday, a Goldman share fetched $186.91 versus $126.60 for Apple.

For all the symbolism, the trigger for the move is less colorful. The manager of the index, the S&P Dow Jones Indices, said it’s making the change in response to a planned stock split for Visa, another Dow member.

After its four-to-one split, Visa will wind up with a lower price. S&P said that would reduce the weight of the information technology sector in the Dow because Visa, a credit-card and payment-processing giant, counts as a tech stock. Adding Apple will help balance out this reduction.

Indices said the decision to fold in Apple won’t alter the overall level of the index, which stood at 17,856 Friday.

AT&T’s stock has risen just 3.5 percent in the past 12 months. That compares with a 10.4 percent gain in the Standard & Poor’s 500. Apple, meanwhile, has jumped 67 percent.