E-commerce giant Amazon (AMZN) is replacing pharmacy chain Walgreens Boots Alliance (WBA) in the Dow Jones Industrial Average.
S&P Dow Jones Indices, which manages the 30 blue-chip stocks listed in the index, said that the change will go into effect prior to the market opening on Feb. 26 of this year.
“This change will increase consumer retail exposure as well as other business areas in the DJIA,” said S&P Dow Jones Indices in a written statement.
The company said that the revision was prompted by Walmart’s (WMT) 3-for-1 stock split, which led to a lower index weighting for the discount retailer.
The change also reflects the increased influence of Amazon’s stock on the overall market and the declining fortunes of Walgreens, which has struggled coming out of the Covid-19 pandemic.
In its most recent quarter, Walgreens reported a loss of $278 million U.S., while Amazon reported a profit of $10.60 billion U.S.
Walgreens has been a component in the Dow 30 index, as it is also known, since 2018, when it replaced General Electric (GE), which had been part of the stock grouping since its creation in 1896.
Amazon’s arrival in the Dow comes three years after cloud computing giant Salesforce (CRM) joined the index.
The addition to the Dow Jones Industrial Average is good news for Amazon as it will require mutual funds and exchange-traded funds (ETFs) that track the index to buy up the company’s stock.
Amazon’s share price has gained 77% in the last 12 months to trade at $167.08 U.S. per share. Walgreens stock has declined 16% in the past year to trade at $22.31 U.S. a share.
