APPLE Inc., the largest U.S. company by market value, will join the Dow Jones industrial average, replacing AT&T Inc., in a change that reflects the dominant position of the iPhone maker in the U.S. consumer economy.

    The decision to nudge aside AT&T, which has been part of the Dow for the better part of a century, is a recognition of how communications and technology have evolved. It’s also a marker of Apple’s transformation, from a struggling company with a small, fervent following two decades ago, into the nation’s predominant consumer tech company.

    “This is a sign of the times, and it might get everyone to look at the Dow more than they have been,” said Richard Sichel, who oversees US$2 billion as chief investment officer at Philadelphia Trust Co. “It would be difficult to pick any 30 companies that would cover the entire economy, especially compared with the S&P 500, but it does give the Dow more credibility.”

    The action, by S&P Dow Jones Indices, had been widely expected since Apple split its shares seven-for-one in June of last year.

    AT&T declined to comment on its removal from the average, of which it has been a member for most of the past 100 years. The stock was added to the Dow in 1916, the year after the first-ever transcontinental telephone call. It was removed in 2004, but after SBC Communications renamed itself AT&T following a 2005 merger, it was reinstated.

    “It was a new way of life: telephones, back then 100 years ago, these talking machines,” said Howard Silverblatt, index analyst at S&P Dow Jones Indices. “Back then, AT&T was it, end of story.”

    After Apple’s stock split, many investors felt it was only a matter of time before the company, whose high stock price had previously made it unsuitable for the price-weighted index, would join it.

    The Dow industrials is the oldest U.S. stock average, first published in 1896. Its compact size — just 30 names — and its mission to reflect the U.S. economy means that many retail investors are more familiar with it than other indexes covering a broader cross-section of the market.

    Even though professional managers generally benchmark against the S&P 500, additions and removals from the Dow are still a big event on Wall Street. It was last altered in September 2013 when Goldman Sachs Group Inc., Visa Inc. and Nike Inc. were added.

    Apple did not respond to requests for comment. The company has a market capitalization of US$737 billion, making it twice the size of the second-largest Dow component, Exxon Mobil Corp.

    (SD-Agencies)