By Michael Wursthorn 

The Dow Jones Industrial Average is getting a makeover.

S&P Dow Jones Indices, which manages the 30-stock benchmark, said it would add Salesforce.com, Amgen Inc. and Honeywell Inc. to the blue-chip index at the start of trading on Monday.

Those three stocks will replace Exxon Mobil Corp., Pfizer Inc. and Raytheon Technologies Corp, respectively.

S&P Dow Jones Indices said the changes were prompted by Apple Inc.'s four-to-one stock split announced last month. Without any other changes to the price-weighted Dow, the split would have reduced the information technology sector's influence in the index. The addition of those three companies helps to mitigate Apple's decision, S&P said.

Apple will start trading on a split-adjusted basis on Monday as well.

"They also help diversify the index by removing overlap between companies of similar scope and adding new types of businesses that better reflect the American economy," S&P said in a statement announcing the changes.

The additions, as well as the stock split, won't disrupt the level of the Dow. That's because S&P is also modifying what is known as the Dow divisor, which is used to calculate the index's point gains or subtractions by multiplying it against the individual price moves of each stock.

Component stocks of the Dow are selected by the index committee, a group that includes editors of The Wall Street Journal, which is published by Dow Jones & Co., a part of News Corp.

Write to Michael Wursthorn at Michael.Wursthorn@wsj.com

 

(END) Dow Jones Newswires

August 24, 2020 18:06 ET (22:06 GMT)

Copyright (c) 2020 Dow Jones & Company, Inc.
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