Business
Dow Reshuffle: Apple Joins Blue-Chip Index, AT&T Gets Booted
BERNARD CONDON, AP Business Writers
MAE ANDERSON, AP Business Writers
NEW YORK (AP) — Apple is in. AT&T is out.
In another milestone for the popular and profitable iPhone giant, Apple will replace AT&T in the venerable Dow Jones industrial average on March 19, the manager of the index announced Friday.
The move isn’t likely to impact the 30-stock index much, and will have no effect on the fortunes of the two companies. But market experts say it does have symbolic importance, sort of like getting an Oscar at the Academy Awards — or at least a nomination.
The change cements Apple as “the gold standard of technology,” says Daniel Ives, a financial analyst at FBR Research. “They’ve really become the modern-day Wright Brothers.”
The reshuffling of the 119-year-old Dow, a barometer of market fortune and folly once dominated by railroads, also reflects a changed business world.
“It underscores that technology continues to be a critical driver of the overall economy,” says Edward Jones analyst Bill Kreher.
Apple is the world’s most valuable company. Its market value on the stock exchange, or what it would take to buy all its shares, closed last month above $700 billion, a first for any company.
Apple won’t get top billing in the Dow, though. Thanks to a quirk in the way the index is calculated, that honor will go to a company a little over a tenth as valuable: Goldman Sachs.
The Dow weights companies by how much it costs to buy a single share, not all of them. On Friday, a Goldman share fetched $186.91 versus $126.60 for Apple.
A look at the musical chairs at the world’s most famous index:
THE REASON
For all the symbolic importance, the trigger for the move is less colorful. The manager of the index, the S&P Dow Jones Indices, said it’s making the change in response to a planned stock split for Visa, another Dow member.
After its four-to-one split, Visa will wind up with a lower price. S&P said that would reduce the weight of the information technology sector in the Dow because Visa, a credit-card and payment-processing giant, counts as a tech stock. Adding Apple will help balance out this reduction.
TWEAKING THE INDEX
S&P Dow Jones Indices said the decision to fold in Apple won’t alter the overall level of the index, which stood at 17,856 Friday.
S&P Dow Jones is casting the move as a sort of a housekeeping maneuver, a way to ensure that the index better reflects the U.S. economy and markets.
The switch is not a reflection of its view of Apple.
“This doesn’t mean we like the stock, or don’t like the stock, or something like that,” says David Blitzer, chairman of the index committee at S&P Dow Jones.
CHALLENGES AT AT&T
While the Dow change wasn’t triggered by anything AT&T did, it comes at a challenging time for the phone giant.
The nation’s second-largest wireless carrier is facing pressure from smaller rivals T-Mobile and Sprint in a competitive environment in which most Americans already have a cellphone.
Its stock has risen just 3.5 percent in the past 12 months. That compares with a 10.4 percent gain in the Standard & Poor’s 500. Apple, meanwhile, has jumped 67 percent.
To keep growing, AT&T has had to look beyond cellphones — to tablets and connected cars, for example. Adding a tablet to a phone plan gets AT&T another $10 in monthly service fees.
The Dallas-based company is also trying to wean customers off equipment subsidies and shift them toward installment plans in which they ultimately pay full price for a phone.
In its most recent quarter, AT&T booked a loss due to one-time expenses. But its revenue rose 4 percent as it added 1.9 million subscribers, double the year-ago quarterly increase.
AT&T has bounced in and out of the blue chip average over the Dow’s long history. It first entered in 1916 as American Telephone & Telegraph, joining Central Leather, Studebaker and other industrial giants in an elite club of 20 companies. Much later, in 2004, AT&T was kicked out only to return the following year when it merged with SBC Communications.
THE DOW STILL MATTERS
Created in 1896, the Dow is one of the oldest gauges of stocks. Grover Cleveland was U.S. president that year. Companies like the Pacific Mail Steamship were counted among its ranks.
The index tracks only 30 stocks. The Standard & Poor’s 500 reflects the moves of 500.
The S&P 500 also ranks companies differently, assigning weights based on the value of all a company’s shares, not just one. That gives Apple more influence on daily moves in the index than any other stock. It accounts for nearly 4 percent of the index.
Professional investors focus more on the S&P 500 because they think it reflects the stock market better. They tend to use that index, not the Dow, to judge the performance of their own portfolios.
Ordinary investors also prefer the S&P 500, judging from the money they’ve put into index funds that mimic its performance. Investors have $4 trillion in 1,261 funds that track the S&P 500, according to Morningstar. That compares with just $13.6 billion in 12 Dow-based index funds.
Still, the Dow can’t be dismissed as a relic. It continues to be much cited and isn’t seen as wildly distorted.
One reason is that, for all its flaws, the Dow has largely mirrored the ups and downs of the much larger S&P 500. In the past 12 months, for instance, the Dow has risen 8.7 percent versus the S&P 500’s 10.4 percent.
The last big Dow shake-up came in September 2013, when Goldman Sachs, Nike and Visa knocked out Alcoa, Bank of America and Hewlett-Packard.
___
AP Business Writer Matthew Craft contributed to this report.
Copyright 2015 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.
Activism
‘Jim Crow Was and Remains Real in Alameda County (and) It Is What We Are Challenging and Trying to Fix Every Day,’ Says D.A. Pamela Price
“The legacy of Jim Crow is not just a legacy in Alameda County. It’s real. It is what is happening and how (the system is) operating, and that is what we are challenging and trying to fix every day,” said D.A. Price, speaking to the Oakland Post by telephone for over an hour last Saturday. “Racial disparities in this county have never been effectively eliminated, and we are applying and training our lawyers on the (state’s) Racial Justice Act, and we’re implementing it in Alameda County every day,” she said.
By Ken Epstein
Part One
Alameda County District Attorney Pamela Price gave an exclusive in-depth interview, speaking with the Oakland Post about the continuing legacy of Jim Crow injustice that she is working to overturn and her major achievements, including:
- restoring and expanding services for victims of crime,
- finding funding for an alternative to incarceration and/or prosecution for substance use and mental health-related misdemeanors and
- aggressively prosecuting corporations for toxic pollution and consumer violations.
“The legacy of Jim Crow is not just a legacy in Alameda County. It’s real. It is what is happening and how (the system is) operating, and that is what we are challenging and trying to fix every day,” said D.A. Price, speaking to the Oakland Post by telephone for over an hour last Saturday.
“Racial disparities in this county have never been effectively eliminated, and we are applying and training our lawyers on the (state’s) Racial Justice Act, and we’re implementing it in Alameda County every day,” she said.
Passed by the State Legislature, this law “is an extremely helpful tool for us to address the racial disparities that continue to exist in our system,” she said.
(The law addresses) “the racial disparities that we find in our juvenile justice system, where 86% of all felony juvenile arrests in the county are Black or Brown children.
“We trained the entire workforce on the Racial Justice Act. We are creating a data system that will allow us to look at the trends and to clearly identify where racism has infected the process. We know that where law enforcement is still engaging in racial profiling and unfair targeting and arresting, we’re trying to make sure we’re catching that.”
Many people do not know much about the magnitude of Alameda County District Attorney’s job. Her office is a sprawling organization with 10 offices serving 1.6 million people living in 14 cities and six unincorporated areas, with a budget this year of about $104 million.
Asked about her major achievements since she took office last year, she is especially proud of the expanded and renewed victims’ services division in the DA’s Office, she said.
“We have expanded and reorganized the entire claims division so that we are now expediting as much as possible the benefits that victims are entitled to. Under my predecessor, they were having to wait anywhere, sometimes as long as a year, to 400 days to get benefits.
“Claims had been denied that should not have been denied. So, we’re helping people file appeals on claims that were denied under her tenure,” D.A. Price said.
“Under my predecessor, (the victims’ service office) was staffed by people who were not trained to provide trauma-informed services to victims, and yet they were the only people that the victims were in contact with. We immediately stopped that practice,” she continued.
“We had to expand the advocate workforce to include people who speak Hmong, the indigenous language of so many people in this county who are victims of crime.”
More African Americans advocates were hired because they represent the largest percentage of crime victims and we hired a transgender advocate and advocates who speak Cantonese and Mandarin. “The predominantly Chinese American community in Oakland was not being served by advocates who speak the language,” said D Price
“We reduced the lag time from the delivery of benefits to victims from 300 to 400 days down to less than 60 days.”
She increased victim advocacy by 38%, providing critical support to over 22,500 victims, a key component of community safety.
Other major achievements:
- She recently filed 12 felony charges against a man accused of multiple armed robberies, demonstrating her seriousness about prosecuting violent crimes
- In October, a jury delivered a guilty verdict in the double murder trial of former Alameda County Sheriff’s Deputy Devin Williams, showing DA Price’s commitment to holding law enforcement accountable.
- She recently charged a man and woman in unincorporated San Leandro with murder, felony unlawful firearm activity, and felony carrying a loaded firearm in public.
- A. Price’s office was awarded a $6 million grant by the state for its CARES Navigation Center diversion program. In partnership with the UnCuffed Project at a Seventh Day Adventist Church in Oakland, the program provides resources and referrals for services to residents as an alternative to incarceration and/or prosecution for substance use and mental health-related misdemeanors.
“This is the largest grant investment in the history of the Alameda County District Attorney’s Office,” said D.A. Price.
She explained that the program now has a mobile unit. “We have washers and dryers. We have a living room. We have a television. It’s a place where people can decompress, get themselves stabilized,” she said.
The project has “the ability to refer people to housing, to more long-term mental health services, to social services, and to assist them in other ways.”
- Her office joined in a $49 million statewide settlement with Kaiser Health Plan and Hospitals, resolving allegations that the healthcare provider unlawfully disposed of hazardous waste, medical waste, and protected health information. The settlement, which involved the state and a half dozen counties, resulted in Alameda County receiving $7 million for its residents.
- DA Price charged a former trucking company employee for embezzling over $4.3 million, showing her commitment to tackling white-collar crime.
- For the first time, Alameda County won a criminal grand jury indictment of a major corporation with two corporate officers that have been sources of pollution. “They had a record of settlements and pollution in this community, and they had a fire that constituted a grave danger,” she said.
Attorney Walter Riley contributed to this article.
Activism
Oakland Post: Week of October 30 – November 5, 2024
The printed Weekly Edition of the Oakland Post: Week of October 30 – November 5, 2024
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Business
Chevron Reports Progress in Flaring, Emissions at Community Town Hall
At the first in a series of community town halls on Oct. 16, Chevron Richmond reported a reduction in year-over-year flaring incidents, both in number and duration, and detailed new technologies and processes that will further drive down emissions and heighten community awareness about operations. Chevron employees also answered questions from the community and listened to concerns at the town hall, which was hosted by Ceres Policy Research and held at CoBiz in downtown Richmond.
By Mike Aldax
The Richmond Standard
At the first in a series of community town halls on Oct. 16, Chevron Richmond reported a reduction in year-over-year flaring incidents, both in number and duration, and detailed new technologies and processes that will further drive down emissions and heighten community awareness about operations.
Chevron employees also answered questions from the community and listened to concerns at the town hall, which was hosted by Ceres Policy Research and held at CoBiz in downtown Richmond.
Similar town halls will be held twice per year over the next five years as part of a settlement agreement with the Bay Area Air Quality Management District (BAAQMD).
The goal is to increase transparency about flaring and increase opportunities for the community to get answers to their questions about potential impacts to the community.
A key output is the creation of a Community Action Plan, or CAP. The CAP aims to create a two-way dialogue between Chevron and neighbors around flaring and environmental compliance.
“Chevron’s focus in this process is one of learning and engagement,” said Brian Hubinger, public affairs manager at Chevron Richmond. “We felt the most efficient way was to bring together a broad selection of community members rather than just think about what it would take to comply with the settlement agreement.”
The first town hall drew a few dozen members of the community, including Chevron employees, representatives of fence-line neighborhoods and members of local environmental organizations.
During the event, Chevron employees reported that 19 BAAQMD-reportable flaring incidents occurred at the refinery from October 2022 to September 2023 with a total duration of 270 hours. During the same period this year, 18 flaring incidents occurred with a total duration of 159 hours, marking a 41% decrease in duration.
Further gains are expected with the implementation of Flare IQ, set to be installed this year and next on all of the refinery’s flaring systems. Flare IQ is described as a supercomputer with an algorithm that gathers data from operations and enables employees to address potential issues before they occur.
Chevron also reported a 40% decrease in particulate matter emissions since the completion of the refinery modernization project in 2018.
In addition, flare gas volume related to Chevron’s new hydrogen plant project, built as part of the modernization project, decreased by 85% since 2019. The hydrogen plant has also reportedly made the refinery 20% more efficient.
“We’re really proud about that,” said Kris Battleson, manager of health, safety and environment at Chevon Richmond.
Neighborhood council leaders joined the president of the local NAACP in lauding the effort toward transparency and accountability. Among them was Vernon Whitmore, president of the Sante Fe Neighborhood Council and member of the 15-person CAP committee.
“The way we were able to talk openly and freely with Chevron – honestly, bluntly and frankly – while developing this program was very good,” Whitmore said. “And it was something that was well-needed at this time.”
Still, residents are skeptical, including Kathleen Sullivan, a longtime community advocate who also serves on the CAP committee. But she added, “you can’t complain about something and not be involved in the solution.”
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