Dow Jones adds Amazon: Party time !
On Tue, 20 Feb 2024, S&P Dow Jones Index announced that $Amazon.com(AMZN)$ is set to join the $DJIA(.DJI)$, replacing $Walgreens Boots Alliance(WBA)$ effectively on Mon, 26 Feb 2024.
After the announcement, Amazon shares rose +1.3% in extended trade, while Walgreens dipped -3%.
In a news release, S&P Dow Jones Indices said that:
The move was prompted by Walmart's decision to split its stock.
Adding Amazon will increase consumer retail exposure as well as other areas in the Dow.
The Dow, which debuted in 1896, is widely followed by retail investors, making it an important reflection of the US stock market.
On the other hand, institutional investors more frequently benchmark their performance against the S&P 500.
As well as dominating online retail, the Seattle company is the leading player in cloud computing, entertainment and other industries.
LPL Financial, Chief Global strategist, Quincy Krosby has the followings to say:
Amazon is almost a hybrid name.
It is one of the names that falls into different categories.
It, in many ways exemplifies what the Dow stands for in terms of representing commerce across the US.
Walmart will remain part of the Dow, although its upcoming three-for-one stock split, effective after market close on Fri, 23 Feb 2024 will effectively reduce its weight in the index.
The Dow is weighted based on the share prices of its components, not on each company's overall market value.
Amazon's inclusion will be a "first" for the Dow index since 2020 when Salesforce, Amgen & Honeywell replaced Exxon Mobil, Pfizer and Raytheon Technologies.
Will Amazon's stock price surge by +57% just like Tesla on its pre-inclusion jump leading up to its official addition in S&P 500 index on 21 Dec 2020?
I certainly hope so! Don't you ?
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Do you think Amazon stock price will continue to rise this week?
Do you think Amazon stock price will continue to rise after it has been added to the Dow, given the short notification period?
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