The e-commerce giant will replace drugstore operator Walgreens Boots Alliance on the Dow, before the opening of trading on Monday.
ADVERTISEMENTAmazon is joining the likes of Microsoft, Apple, Disney and other giants on the Dow Jones Industrial Average (DJIA), the stock market index of 30 prominent companies listed on stock exchanges in the United States.
As one of the three most popular stock indexes in the US, Dow, which debuted in 1896, is known for providing a reliable reflection of how the most value-oriented, well-established and large-cap companies are performing, and whose prices tend to be less volatile.
The e-commerce giant will replace drugstore operator Walgreens Boots Alliance on the Dow, before the opening of trading on Monday, S&P Dow Jones Indices said.
The shift was prompted by Walmart’s decision to do a 3-to-1 stock split, which will reduce its stock’s weighting in the index. The Dow is a price-weighted index, so stocks that fetch higher prices are given more weight.
Seattle-based Amazon will join the Dow on the same day that Walmart executes its stock split.
“Reflecting the evolving nature of the American economy, this change will increase consumer retail exposure as well as other business areas in the DJIA,” S&P Dow Jones Indices said.
Amazon’s entry into the Dow, Walgreens’ exit and Walmart’s stock split will cause a ripple effect on the weighting of the Dow stocks.
Once the shift is completed, Amazon’s weight in the Dow will rank 17th out of the 30 stocks in the index. Walmart’s weighting will drop to 26 from 17, while UnitedHealth Group will remain the most heavily weighted stock on the index.
Also before the start of trading on Monday, ride-sharing service Uber Technologies will be added to the Dow Jones Transportation Average, S&P Dow Jones Indices said.
The change will give the index exposure to the ride-sharing industry.
San Francisco-based Uber will take the spot now held by JetBlue Airways, whose low share price caused its weight in the index to drop to less than one-half of one percentage point.
S&P Dow Jones Indices made the announcements after the closing bell. Amazon shares rose 1.4% in after-hours trading, while Uber’s stock picked up 1.1%.