NEW YORK — Apple is in. AT&T is out.

In another victory of sorts for the popular and profitable iPhone giant, Apple will replace AT&T in the venerable Dow Jones industrial average on March 19, the manager of the index announced Friday.

The move isn’t likely to affect the 30-stock index much, and will have no effect on the fortunes of the two companies. But market experts say it does have symbolic importance, sort of like getting an Oscar at the Academy Awards – or at least a nomination.

The change cements Apple as “the gold standard of technology,” says Daniel Ives, a financial analyst at FBR Research. “They’ve really become the modern-day Wright Brothers.”

The reshuffling of the 119-year-old Dow, a barometer of market fortune and folly once dominated by railroads, also reflects a changed business world.

“It underscores that technology continues to be a critical driver of the overall economy,” says Edward Jones The Associated analyst Bill Kreher.

Apple is the world’s most valuable company. Its market value on the stock exchange, or what it would take to buy all its shares, closed last month above $700 billion – a first for any company.

Apple won’t get top billing in the Dow, though. Thanks to a quirk in the way the index is calculated, that honor will go to a company a little over a tenth as valuable – Goldman Sachs.

The Dow weights companies by how much it costs to buy a single share, not all of them. On Friday, a Goldman share fetched $186.91 versus $126.60 for Apple.


While the Dow change wasn’t triggered by anything AT&T did, it comes at a challenging time for the phone giant.

The nation’s second-largest wireless carrier is facing pressure from smaller rivals T-Mobile and Sprint in a competitive environment in which most Americans already have a cellphone.

Its stock has risen just 3.5 percent in the past 12 months. That compares with a 10.4 percent gain in the Standard & Poor’s 500. Apple, meanwhile, has jumped 67 percent.

To keep growing, AT&T has had to look beyond cellphones – to tablets and connected cars, for example. Adding a tablet to a phone plan gets AT&T another $10 in monthly service fees.

The Dallas-based company is also trying to wean customers off equipment subsidies and shift them toward installment plans in which they ultimately pay full price for a phone.

AT&T has bounced in and out of the blue chip average over the Dow’s long history. It first entered in 1916 as American Telephone & Telegraph, joining Central Leather, Studebaker and other industrial giants in an elite club of 20 companies. Much later, in 2004, AT&T was kicked out only to return the following year when it merged with SBC Communications.


Created in 1896, the Dow is one of the oldest gauges of stocks. When it was created, Grover Cleveland was U.S. president. Companies such as the Pacific Mail Steamship were counted among its ranks.

The index tracks only 30 stocks. The Standard & Poor’s 500, an index that reflects the performance of 500 stocks, is the one that professional investors use to judge the performance of their own portfolios.

Ordinary investors don’t focus as much on the Dow either, judging from the money they’ve put into index funds that mimic its performance. Investors have just $13.6 billion in 12 Dow-based index funds, according to Morningstar. That compares with $4 trillion in 1,261 S&P 500 indexes.

Still, the Dow can’t be dismissed as a relic. It continues to be much cited and isn’t seen as wildly distorted.

One reason is that, for all its flaws, the Dow has largely mirrored the ups and downs of the much larger S&P 500. In the past 12 months, for instance, the Dow has risen 8.7 percent versus the S&P 500’s 10.4 percent.

The last big Dow shake-up came in September 2013, when Goldman Sachs, Nike and Visa knocked out Alcoa, Bank of America and Hewlett-Packard.