Becoming a component of Dow Jones Industrials is considered to be a prestigious thing for a stock and in addition to all the records that Apple Inc. (NASDAQ:AAPL) has achieved in the last few quarters, it managed to get into the Dow 30. From March 18, Apple Inc. (NASDAQ:AAPL) stock will officially be considered as a Dow Jones Industrials component. CNBC’s David Faber discussed on CNBC about Apple Inc. (NASDAQ:AAPL) entering and AT&T Inc. (NYSE:T) leaving Dow 30.
But the general feeling is that Dow would have done even better that how it had done, if Apple Inc. (NASDAQ:AAPL) was included much earlier. Faber thinks otherwise.
“They could not have done that certainly before its split 7 for 1. Because it’s a price weighted index and would throw it off so much. But even so at $126 that’s a pretty big number. Always important to point out as opposed to being added as S&P 500 for example, we have so many funds that follow it, it need to be weighted in the name, that’s not the case with the Dow. There is really not a lot of index money that follows the Dow, but it is prestigious nonetheless,” Faber said.
AT&T Inc. (NYSE:T) will be leaving Dow Index as a result of the inclusion of Apple Inc. (NASDAQ:AAPL). But Verizon Communications Inc. (NYSE:VZ) is still considered as a Dow Component. Does this mean something in the competition between the two leading carriers in US? Faber feels that it becomes a psychological blow for AT&T Inc. (NYSE:T). Faber said that it might not mean a lot in the competition between the two. He pointed out that in the past many companies left Dow Index and still went on to do very well, like Alcoa Inc (NYSE:AA). He thinks that leaving Dow might be a Psychological blow for AT&T Inc. (NYSE:T) but it might not mean anything to the company’s performance.
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