After many years on the outside, tech giant Apple Inc. (AAPL) will finally be added to the Dow Jones Industrial Average, S&P Dow Jones Indices announced on Friday.
Apple, the maker of the iPhone and iPad, will replace telecom giant AT&T Inc. (T) in the well-known stock market index at the close of trading on Wednesday March 18th.
S&P Dow Jones said the change was prompted by Visa Inc.'s (V) upcoming four-for-one stock split, which is scheduled to be effective at the same time.
The post-split adjusted lower price of Visa will reduce the weighting of the Information Technology sector in the index, S&P Dow Jones said. Adding Apple to the index will help to offset the reduction.
David M. Blitzer, Managing Director and Chairman of the Index Committee at S&P Dow Jones Indices, said, "As the largest corporation in the world and a leader in technology, Apple is the clear choice for the Dow Jones Industrial Average, the most recognized stock market measure."
In addition to Visa's upcoming stock split, Blitzer said Apple's seven-for-one stock split last June brought its stock price down closer to the median price in the Dow.
S&P Dow Jones said the addition of Apple won't cause any disruption in the level of the Dow, as the divisor used to calculate the index from the components' prices will be changed prior to the opening on March 19th.
Investors have been calling for Apple's addition to the Dow for a number of years due to its prominent role in the technology sector.
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