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Dow Reshuffle: Apple Joins Blue-Chip Index, AT&T Gets Booted

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In this Wednesday, Nov. 20, 2013, file photo, the Apple logo is illuminated in the entrance to the Fifth Avenue Apple store, in New York. Six weeks ago, the iPhone and iPad maker announced plans to split its stock for the first time in nine years. Since then, Appleís shares have surged more than 20 percent. The stock split helped renew investor interest in Apple Inc., already the worldís most valuable company. (AP Photo/Mark Lennihan)

In this Wednesday, Nov. 20, 2013, file photo, the Apple logo is illuminated in the entrance to the Fifth Avenue Apple store, in New York. (AP Photo/Mark Lennihan)

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.

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Business

Oakland City Council Considers Proposal to Limit City’s Highest Annual Rent Hike in History

In Oakland, landlords can raise rents up to 100% of the inflation rate. So, a 6.7% increase in inflation this year means that landlords can raise rents the same percentage. For an apartment rented for $2,000 a month, the 6.7% rent increase would mean that a tenant’s rent would increase more than $100 to $2,134 a month.

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District 3 Councilmember Carroll Fife introduced a bill to bring Oakland’s calculator more in line with other cities. The law is scheduled for a vote on May 31. If it passes before the current allowable rent hike goes into effect on July 1, then the lower allowable increase will take effect instead.

By Brandon Patterson

Last month, Oakland housing regulators announced that starting in July, landlords would be permitted to raise rents by up to 6.7% — the highest annual increase in the city’s history. The announcement prompted an outcry from renters at City Council meetings and hearings in recent weeks – and calls to local councilmembers.

Now, City Council is considering a proposal to limit the rent increase and give renters, many of whom are already struggling, some needed relief.

In many Bay Area cities, where housing has been an issue for decades, the amount landlords are allowed to raise rents every year is tied to inflation. This stabilizes rents by limiting increases, ensuring more security for renters’ households.

In Oakland, landlords can raise rents up to 100% of the inflation rate. So, a 6.7% increase in inflation this year means that landlords can raise rents the same percentage. For an apartment rented for $2,000 a month, the 6.7% rent increase would mean that a tenant’s rent would increase more than $100 to $2,134 a month.

This deviates from other cities like Berkeley and San Francisco, however, where the annual allowable rent increase is capped at 65% and 60% of inflation, respectively, according to Oaklandside. That means that for the same $2,000 apartment, rents would increase to about $2,087 in Berkeley or $2084 in San Francisco — about $50 less.

Housing justice and tenants’ rights groups have long criticized how differently Oakland calculates its rent hikes from other cities, and earlier this month, District 3 Councilmember Carroll Fife introduced a bill to bring Oakland’s calculator more in line with other cities. The bill would reduce the allowable annual rent increase to just 60% of inflation. It would also cap the allowable rent increase to 3% of the current rent, even if the inflation rate would allow for a higher one.

“I do want to create some security for renters,” Fife told NBC Bay Area in a recent interview. “Oakland is a majority renter city: Over 60% of the residents of the city of Oakland are renters, and it doesn’t make sense to put them in this type of jeopardy.”

“It’s not like we’re coming out of COVID—it’s all around us,” Mark Dias, co-chair of the Oakland Tenants Union, told Oaklandside. “If tenants weren’t able to financially recover from that period of time, they’re also going to be hit with an increase that is legal,” adding that he was “astonished” by the pending rent hike this year.

But some property owners are pushing back, arguing that increases in the cost of operating housing necessitates the higher rent hike. “There has also been an extraordinary increase in everything: water, gas, electric, sewer, repair services, equipment, appliances, plumbing,” Derek Barnes, CEO of the East Bay Rental Housing Association, told NBC Bay Area. “You also have a housing stock that’s older, that really needs a lot of maintenance.”

The law is scheduled for a vote on May 31. If it passes before the current allowable rent hike goes into effect on July 1, then the lower allowable increase will take effect instead.

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Bay Area

Mom and Pop Business Destroyed by Marriott Project

The Thomases have lost their tenants because of the noise and dust. The Thomases’ last remaining tenant, who asked not to be named, says her quality of life has diminished drastically, “I can’t open my windows. The shadow of their building has taken our sunlight and all my plants have died,” she said.

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Scaffolding at a Marriott structure in Downtown Oakland broke loose March 28, threatening the safety of pedestrians below. Photo by Craig Jones.
Scaffolding at a Marriott structure in Downtown Oakland broke loose March 28, threatening the safety of pedestrians below. Photo by Craig Jones.

By Tanya Dennis

Uncle Willie’s Bar-be-cue, located on 14th Street in Downtown Oakland, continues to struggle to survive the Marriott Hotel construction literally occurring in their backyard. Craig Jones, the son of owners William and Beverly Thomas, says it is a clear example of white power/privilege suppressing Black power and building of generational wealth.

“My parents bought this building in 2005 and have operated Uncle Willie’s for 16 years,” Jones said. “We have four rental units on the top of our store and, in 2017, contracted with The Kingdom Development Group to do a complete teardown and rebuild 24 units of housing, a $10 million project.

“This was my parents’ plan to pass generational wealth to me. Then, in 2018, Marriott started construction next door. We could no longer cook outside in the back because of the dust, danger and filth created by Marriott, and we lost half our tenants,” Jones said.

The Thomases went to the mayor’s office and the Oakland Planning Department seeking help, but nothing worked in their favor. The Planning Department told them to seek legal counsel.

“We’ve lost $2 million in business since Marriott encroached on our property, and all they want to offer us is $58,000, and that’s for future use of our backyard so they can finish the back side of their building. They said if we accept the money, we can’t sue them for any damages, so we didn’t sign and counter-offered for $250,000. We haven’t heard from them since, and that was in January,” said Beverly Thomas.

After Marriott completes the back side of the hotel, their last phase of construction is a four-story parking garage that will be constructed behind the Thomases’ property.

“Our backyard was where we cooked and smoked our food, and, after the pandemic, served our clients,” Jones said. “That’s impossible now, and will remain so, as the Marriott’s 18-story structure has created a wind-tunnel, which makes our property perpetually cold and has blocked out the sun.”

The Thomases have lost their tenants because of the noise and dust. The Thomases’ last remaining tenant, who asked not to be named, says her quality of life has diminished drastically, “I can’t open my windows. The shadow of their building has taken our sunlight and all my plants have died,” she said.

Further, going outside in the backyard can be dangerous. “I fear going into the backyard to perform simple daily tasks like taking out the garbage or doing laundry,” she said. “A metal bit is wedged in my window screen. If not for the screen, that metal piece would’ve broken my window,” she said. (During Jones’ interview with the Post outside his restaurant, a nail hit his shoulder.)

The Post contacted Joshua Bird, Marriott’s legal representative for comment but he declined stating he would get in touch with the Thomases directly, as “Marriott strives to be a good neighbor.” Two weeks have passed and the Thomases have not been contacted.

The Thomases’ attorney Edward Lai sent a cease-and-desist letter to Bird on May 12th and received no response. On Tuesday of this week Lai filed a formal complaint against Marriott.

William Thomas, who passed away in May 2021, died fearing Marriott was going to squeeze his family out of their property. Craig and Beverly Thomas now fear the same.

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Activism

Make Mental Wellness Part of Total Health for Black Communities

The pandemic has propelled health inequity and racism into news headlines and helped spark national conversations about the health disparities that face the Black, Indigenous, and People of Color (BIPOC) communities. The impact of decisions about the treatment we receive or deserve are often driven by racism and the resulting implicit bias that individuals who have sworn to take care of their patients often harbor. And this affects our physical, mental, and emotional health and ultimately health outcomes.

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These conversations have provided a platform for discussion and opportunities to educate, dispel misinformation and break stigmas. Rhonda Smith, executive director of California Black Health Network.
These conversations have provided a platform for discussion and opportunities to educate, dispel misinformation and break stigmas. Rhonda Smith, executive director of California Black Health Network.

By Rhonda Smith

The next phase of the COVID-19 pandemic in California has arrived. As the state begins to implement its SMARTER Plan, protecting ourselves and our communities from COVID-19 and its fast-spreading variants through vaccination can ensure better outcomes for us all.

Despite mask mandates ending, we must continue to spotlight the importance of keeping Black and African Americans healthy and encourage our community to think about being more proactive about our overall health and well-being. We can start by focusing on our whole selves—our physical, mental, and emotional health.

The pandemic has propelled health inequity and racism into news headlines and helped spark national conversations about the health disparities that face the Black, Indigenous, and People of Color (BIPOC) communities. The impact of decisions about the treatment we receive or deserve are often driven by racism and the resulting implicit bias that individuals who have sworn to take care of their patients often harbor. And this affects our physical, mental, and emotional health and ultimately health outcomes.

A reflection on our historical relationship with the medical community has certainly warranted the level of distrust of the healthcare system, and the many stories of outright racism and discrimination experienced in the past.

One example is Dr. James Marian Sims, who performed surgeries and experiments on Black women without their permission or anesthesia. Another example, which many of us are familiar with, is the Tuskegee Syphilis Study, which was administered by the U.S. Public Health Service from 1932 to 1972 to better understand syphilis.

During the four decades, hundreds of Black men in Tuskegee, Alabama, were injected with the disease without giving their consent; and even once penicillin became a common syphilis treatment, they were left untreated.

Our distrust of the healthcare system has been further shaped by present-day experiences, with many Blacks and African Americans saying they have experienced racism during a medical visit or that their physical pain or discomfort is frequently ignored.

Unfortunately, our healthcare system has often disregarded BIPOC patient needs, and systemic racism has morphed into a true public health crisis. Despite this, as Blacks and African Americans, we have persisted. Our individual and cultural resilience equips us to persevere and survive in a system built on a foundation of discriminatory design.

As part of our culture and heritage, we have relied on an oral tradition that passes on stories about how we should care for ourselves and remedies that heal our ailments. I hear many of these stories through our network and I heard them in my own family. We have relied on our own learnings; and in some instances, we have relied on our faith. And through it all, we have found ways to maintain our health and wellness.

However, we are weathered, and enduring resiliency is hard. If we are not whole, we are not healthy. If we are not healthy, we cannot be resilient.

Resilience is an element of mental health, and our whole health comprises elements of physical, mental, and emotional wellness. This means our whole health needs to be a priority, not only one dimension or another. We must invest in our individual health and wellbeing and make it a priority so that our families, community, and all of us will be healthier and live longer.

We must look to the past to inspire a better future so that we can rewrite our heath history here in California. I appreciate the state’s COVID-19 awareness campaign which has sought to address mental health concerns and other issues that impact us by partnering with African American and Black medical experts and advocates for community conversations.

These conversations have provided a platform for discussion and opportunities to educate, dispel misinformation and break stigmas.

We are not strangers to race-based adversity, and its impact on our health and wellbeing. Racism, health inequities inequity, police brutality, and residential redlining each affect public health in its own unique way. Yet we continue to persevere.

Black History Month was a time to remember our past, honor our heroes, celebrate our great legacy of achievement. The theme for the month this year was “Black Health and Wellness”, and it was meant for us to prioritize total wellness and build a healthier history for us now and for generations to come.

For more about COVID-19, including guidance on masking and testing, visit covid19.ca.gov. You should also visit covid19.ca.gov or the CDC.gov more timely, accurate information about the pandemic. To schedule an appointment for a vaccination or a booster, visit MyTurn.ca.gov, or call 1-833-422-4255.

Rhonda Smith, executive director of California Black Health Network

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