Apple to join Dow blue-chip index, replacing AT&T

IPhone and iPad maker Apple is already the world's largest listed company. Now it will be part of America's oldest and most storied equity index.

The California tech giant will be added to the elite blue-chip Dow Jones Industrial Average on March 19, replacing venerable telecom company AT&T, the index announced Friday.

With a market capitalization of $730 billion, more than $300 billion above number-two company Google and four times that of AT&T, Apple was a natural fit for the 30-member Dow, S&P Dow Jones Indices said.

They said Apple would ensure adequate representation for the information-technology sector on the Dow, which for decades served as a guideline for conservative, value-focused investors and an indicator of the health of US industry.

"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," said David Blitzer, managing director of the index committee at S&P Dow Jones Indices.

The index dropped AT&T after concluding the Dow was "over-weighted" in telecommunications, Blitzer said.

The addition of Apple marks another key landmark in the evolution of the 119-year-old Dow and the latest confirmation of the company as an enduring power in the US corporate landscape.

Originally consisting of General Electric and 11 other "smokestack" companies, the Dow index has progressively diversified to include other sectors, such as retail and telecommunications.

Over the years, the comings and goings of the index have marked the shifting fates of companies and the economy.

The first of the modern technology companies to join was International Business Machines, or IBM, in 1932. The index added Microsoft and Intel in 1999 and Oracle in 2009.

AT&T, whose history dates back to the invention of the telephone itself by Alexander Graham Bell, first joined the Dow index in 1939 as American Telephone & Telegraph.