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Wall Street’s blue-chip index is getting a shakeup this week that will make its roster look more modern and potentially help reverse its recent underperformance.
On Monday, Amazon officially becomes a member of the Dow Jones Industrial Average, replacing Walgreens Boots Alliance. Shares of the dominant e-commerce platform have surged more than 80% over the past year, making it one of several large stocks that have powered the S&P 500 to new highs while the Dow has struggled to keep up.
The Dow is a smaller average than the S&P 500, with just 30 components, and it’s weighted by the share price of the individual stocks rather than the companies’ total market value. That makes some investors view the Dow, begun in May 1896, as a poor representation of the American stock market.