Salesforce, Amgen, Honeywell to Join Dow Jones Industrial Average
August 24 2020 - 6:21PM
Dow Jones News
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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