Amazon and Uber to Join Dow Jones Industrial Average, Replacing Walgreens and JetBlue
• Amazon replacing Walgreens Boots Alliance and Uber replacing JetBlue in Dow Jones indexes • Study shows stocks removed from indexes often outperform those that replace them • Removed stocks tend to be struggling while added stocks are riding high, so contrarian reversion is expected • Short-term volatility expected around index changes but long-term impact has declined dramatically • Dow is price-weighted so impact of changes likely smaller than for other market cap weighted indexes