From the South African Press Association
Lamp oil was a major commodity when the Dow Jones Industrial Average was first devised. The keepers of the index are keeping up with the times by adding Apple in a milestone for the technology sector.
The Dow Jones Industrial Average used the last day of winter for spring cleaning, disconnecting telecommunications legacy company AT&T from the index and picking technology trendsetter Apple for the average’s basket of blue-chip stock.
Apple has the world’s largest market capitalization and is poised to bring its smartwatch to the market as it seeks to continue to dominate the lucrative leading edge of the technology sector.
The Dow industrials, launched in 1896 by Wall Street pioneer Charles Dow as a 12-stock barometer of industrial listings, have always been a who’s who of the US economy, expanded to 30 stocks since 1928.
The original roster of companies was drawn entirely from the heavy industrial and commodity sectors, including sugar, cottonseed oil, tobacco, leather and rubber, and such forgotten names as Chicago Gas, National Lead and Tennessee Coal & Iron.
General Electric, the classic diversified American conglomerate, is the only current Dow component that was among the original 12 companies, though not continuously.
An extremely high stock valuation had long kept Apple out of the Dow industrials, but a seven-for-one stock split last year brought the share price closer to the levels of other components in the index.
Credit card company Visa’s own four-for-one stock split, carried out Thursday, required revisions to the index’s weighting, opening an opportunity to replace AT&T with Apple.
AT&T is a corporate descendant of telephone inventor Alexander Graham Bell’s American Telephone and Telegraph Company, which was once a regulated monopoly with 1 million employees in the 1960s. The company newly outside of the Dow industrials is a shadow of its former self, fighting for market share in the dog-eat-dog mobile phone business.
