NEW YORK – Amazon.com Inc. is being added to the Dow Jones Industrial Average, joining Apple, Walt Disney, Walmart and other companies that make up the 30-stock average.
The e-commerce giant will replace drugstore operator Walgreens Boots Alliance in the Dow before the open of trading on Monday, S&P Dow Jones Indices said Tuesday.
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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. UnitedHealth Group will remain the most heavily weighted stock in 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 help 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%.