Amazon is joining the list of prominent companies included in the Dow Jones Industrial Average.
The S&P Dow Jones Indices announced on Tuesday that due to the evolving nature of the American economy, Amazon.com Inc. would be replacing Walgreens Boot Alliance in the Dow Jones Industrial Average (DJIA) effective Monday, February 26.
Adding Amazon to the DJIA is reportedly being done to increase consumer retail exposure and other business areas in the DJIA. The change is also being carried out because of Walmart’s upcoming 3:1 stock split, which reduced the big box retailer’s overall weight in the index.
Following the news announcement, shares of Amazon (Nasdaq: AMZN) rose 1.3%, while shares of Walgreens (Nasdaq: WBA) dropped 3%, according to MarketWatch.
Since Amazon is a multi-faceted business that can fall into many categories, its inclusion in the DJIA was expected, according to Quincy Krosby, chief global strategist at LPL Financial in Charlotte, North Carolina.
“Amazon is almost a hybrid name. It’s one of the names that falls into different categories,” said Krosby, Reuters reported. “[Amazon], in many ways, exemplifies what the Dow stands for in terms of representing commerce across the United States.”
Another significant change set to take place next Monday is Uber Technology’s (NYSE: UBER) inclusion in the Dow Jones Transportation Average. Uber will replace JetBlue Airways Corp. (Nasdaq: JBLU) to help the index “gain exposure to the ride-sharing industry.”
The change was also prompted by JetBlue’s dismal index weight, which was caused by its low share price. JetBlue’s share price was $6.72 as of the market open on February 22, marking a nearly 30% drop from its 52-week high of $9.72.
All changes will go into effect before the opening bell on Monday.
