In a new development concerning the US stock market, Amazon is set to join the esteemed Dow Jones Industrial Average, stepping into the position previously held by Walgreens Boots Alliance, according to S&P Dow Jones Indices.
The announcement sparked a 1.3 percent surge in Amazon’s stock, while Walgreens experienced a 3 percent decline following the news.
With Amazon’s inclusion, the Dow will experience an uptick in consumer retail exposure, a move aligned with Walmart’s recent decision to split its stock, which prompted the change, according to S&P Dow Jones Indices.
Quincy Krosby, chief global strategist at LPL Financial, emphasized Amazon’s versatility, labeling it as a “hybrid name” that epitomizes the Dow’s representation of commerce throughout the United States.
Amazon’s induction into the Dow, effective at the commencement of trading next week, marks a momentous occasion for the index, which has been a pillar of the US stock market since its establishment in 1896.
As a benchmark widely monitored by both retail and institutional investors, the composition of the Dow holds considerable significance in gauging market trends.
While Amazon’s inclusion is poised to reshape the Dow, Walmart will maintain its position in the index despite an impending three-for-one stock split.
Nevertheless, the stock split will reduce Walmart’s influence in the index, which is determined based on the share prices of its constituents rather than their overall market capitalization.
In a parallel development, Uber Technologies is slated to join the Dow Jones Transportation Average, supplanting JetBlue Airways Corp, according to S&P Dow Jones Indices.
This alteration will provide the transportation index exposure to the burgeoning ride-hailing sector, reflecting the index’s adaptability to emerging industries.
Amazon’s planned introduction to the Dow marks the first change since 2020 when Salesforce, Amgen, and Honeywell International replaced Raytheon Technologies, Exxon Mobil, and Pfizer.
Meanwhile, Walgreens, which joined the Dow in 2018, is ceding its position to Amazon after a three-year tenure, displacing General Electric.
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