Apple to Join 29 other Dow Jones Industrial Average stocks

Technology gaint Apple will join Dow Jones Industrial Average (DJIA) stocks after the close of trading March 18. The maker of iPhone and iPad will replace AT&T, which is a Dow member for nearly 100 years.

DJIA, which is also called Dow 30, is a stock market index and one of several indices created by Wall Street Journal editor and Dow Jones & Company co-founder Charles Dow.

The index was created in 1896 and is based on the share prices of the 30 companies in the average. Since DJIA comprises only 30 firms, the change of just one or two components in the index can make a major difference in the metrics for the entire index.

In September of 2013, the Dow Jones added Visa Inc, Nike Inc and Goldman Sachs Group, In order to make room for them, the index dropped Alcoa, Hewlett-Packard and Bank of America Corp.

Although Apple entered the index Thursday, it’s Goldman Sachs that will see its influence. The investment bank will gather the biggest weighting after a stock split this week by Visa, New York-based Goldman Sachs, with a 7.1% share. It will be the first bank to hold the top spot since JPMorgan Chase & Co. in 2000.

Apple is the world’s most valuable company at $748 billion in market value. It will take a backseat to a company that’s just over a 10th its size. In the Harris Poll earlier this year, the tech giant was ranked as the ninth most-loved company while Goldman Sachs came in as the least loved.

Donald Selkin, who helps manage about $3 billion of assets as chief market strategist at National Securities Corp. in New York, said, “The Dow is very strangely constructed. You have the company with by far the highest market capitalization as the fifth-most influential stock in the index. The Dow is not exactly made up of the companies that best show where the economy is, it’s bizarre”.