It’s time for Apple, as well as AT &. T
In another victory popular and highly profitable manufacturer of iPhone, Apple will replace AT & amp; T in the ancient but industrial average venerable Dow Jones on March 19, announced Friday managers index.
It is likely that much impact as the average of 30 industrial stocks, and will have no effect on the fortunes of any of the two companies. But market experts say the decision has a symbolic significance.
The change cemented Apple as “the gold standard of technology,” says Daniel Ives, financial analyst at FBR Research. “They have become the Wright Brothers of the modern era”.
The changes in the Dow, a barometer of the fortunes and sufferings of the market created 119 years and once dominated by railroad ago, also reflects changes occurred in the business world.
“Stresses that technology remains a critical driver of the economy in general,” says Bill Kreher, an analyst at Edward Jones.
Apple is the company most valuable in the world. Its market value on the stock, ie the amount of money needed to buy all its shares closed last month above 700,000 million, the first company to reach that number.
But Apple does not occupy the first position in the Dow. Thanks to a detail on how the index is calculated, that honor will go to a company with just over a tenth of the value of Apple. Goldman Sachs
The Dow weighted companies based on how much buy a single action, not all. On Friday, shares of Goldman cost $ 187.72, compared to 127.53 by Apple.
Despite its symbolic importance, the reason for the decision is less colorful. The administrator of the index, S & P Dow Jones Indices, said the change is in response to a planned stock split Visa, also a member of the Dow
After a split four to one, Visa end. with a lower price. S & P said it would reduce the weight of the IT industry in the Dow because Visa, a giant credit card and payment processing, counts as a technological title. Adding to Apple help offset this reduction
S & amp;. P Dow Jones Indices said his decision to welcome Apple does not alter the overall level index
S & amp;. P Dow Jones presents the decision as a way to ensure that the index better reflects the economy and stock markets in the US
And although the change was not caused by anything that AT &. T did, occurs in difficult times for phone giant.
The second largest mobile phone country faces pressure from smaller as T-Mobile and Sprint rivals in a competitive environment in which most Americans already have a cell phone.
To keep growing, AT & T has had to look beyond mobile, such as tablets and connected vehicles, for example. Add a tablet to a phone plan will mean to AT &. T another $ 10 in monthly charges
AT & T has entered and left the Dow in its long history. He joined the index for the first time in 1916 when it was called American Telephone & amp; Telegraph, joining Central Leather, Studebaker and other industrial giants in an elite club of 20 companies. In 2004 they released the index, and returned the following year after its merger with SBC Communications.
Created in 1896, the Dow is one of the oldest market barometers. The index keeps track only 30 shares. The Standard and Poor’s 500, a clear barometer that reflects the performance of 500 stocks, is the most followed by professional investors to determine the performance of their portfolios.
However, the Dow can not be overlooked, is quoted as widely and is not considered to suffer from severe distortions.
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