In a significant shakeup, Walgreens Boots Alliance is set to be ousted from the 30-stock Dow Jones Industrial Average, with Amazon poised to take its place, announced S&P Dow Jones Indices, the index’s manager, in a statement on Tuesday.
The decision reflects a strategic move by S&P Dow Jones Indices to adapt to the evolving landscape of the American economy, aiming to enhance the Dow’s exposure to the consumer retail sector.
Investors tracking the Dow Jones Industrial Average will now gain exposure to Amazon’s stock performance, as the e-commerce giant becomes the latest addition to the prestigious index, joining tech behemoths Apple and Microsoft.
Amazon’s inclusion in the Dow 30 aligns with its stature among the “Magnificent Seven,” a cohort of top-performing tech stocks. Notably, while Meta, Nvidia, Tesla, and Alphabet are part of this group, they are not currently included in the Dow Jones Industrial Average, although all seven stocks feature in the broader S&P 500 index.
While historically, additions to or removals from the Dow have had minimal impact on companies’ stock performances, inclusion in the index, which dates back to 1896, carries a certain prestige. The index strives to mirror the most influential companies in the US economy, with a notable tilt towards technology stocks in recent years.
The transition is scheduled to take effect before the opening of the US stock market on Monday, February 26. Following the announcement, Amazon’s stock surged over 1%, while Walgreens’ stock witnessed a 3% decline in after-hours trading on Tuesday.
Additionally, S&P Dow Jones Indices revealed that Uber would replace JetBlue Airways in its Dow Jones Transportation Average, a 20-stock index monitoring the performance of US transportation companies. The decision was spurred by JetBlue’s low share price, according to the company.
Both Walgreens and JetBlue have faced challenges in recent years, reflected in their share price declines. Walgreens’ stock has plummeted by 68% over the past five years, while JetBlue’s shares have seen a 59% decline during the same period.
