Verizon joined the Dow Jones Industrial Average in 2004, when AT&T was removed and the index needed a new telecommunications name. It held that seat for 22 years. S&P Dow Jones Indices revealed on June 23 that the seat now belongs to someone else.
Alphabet (GOOGL) will replace Verizon Communications (VZ) in the 30-stock index before the market opens on June 29, CNBC reported. Alphabet's stock climbed about 1% to around $350 on the announcement. Verizon fell about 2% to around $45.
The Dow is a price-weighted index. A stock's nominal share price determines how much it moves the benchmark, not its market capitalization. Verizon at around $45 per share accounted for just 0.5% of the Dow's total weight, a figure S&P Dow Jones Indices cited directly in its announcement.
S&P Dow Jones Indices also said directly that "persistently lower-priced stocks have an immaterial impact on the index." Verizon at $45 a share was one of those stocks.
More Wall Street:
Alphabet (GOOGL) will replace Verizon Communications (VZ) in the 30-stock index before the market opens on June 29, CNBC reported. Alphabet's stock climbed about 1% to around $350 on the announcement. Verizon fell about 2% to around $45.
The Dow is a price-weighted index. A stock's nominal share price determines how much it moves the benchmark, not its market capitalization. Verizon at around $45 per share accounted for just 0.5% of the Dow's total weight, a figure S&P Dow Jones Indices cited directly in its announcement.
S&P Dow Jones Indices also said directly that "persistently lower-priced stocks have an immaterial impact on the index." Verizon at $45 a share was one of those stocks.
More Wall Street:
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