Dow Jones Industrial Average News
“The Dow Jones Industrial Average announced a major shakeup on Monday after the market closed — it booted Pfizer, Raytheon Technologies and ExxonMobil, the oldest member of the index, having joined in 1928.
What happened: Salesforce, Amgen and Honeywell will replace those companies to “help diversify the index … and adding new types of businesses that better reflect the American economy,” S&P Dow Jones Indices said in a note announcing the changes.
The new companies join the Dow on Aug. 31.
GE, the last original member of the Dow, was removed two years ago
Driving the news: The changes seem more reflective of a desire for better-performing stocks than more accurate representation of a changing U.S. economy — the Dow will actually have a lower percentage of tech after the additions.
Because the Dow is a stock-price-weighed index, Apple’s four-to-one stock split would have reduced the Dow’s weighting of tech stocks from 27.6% to 20.3%.
“By adding Salesforce, you can come back to 23.1% of the Dow being in technology,” Howard Silverblatt, senior index analyst at S&P Dow Jones Indices, told CNBC.”
Stock market source: https://www.axios.com/dow-jones-changes-members-pfizer-exxon-raytheon-6ab831cd-a9bf-47f2-9788-10f8c59d1998.html
