ExxonMobil, Pfizer and Raytheon Exit the Dow Jones
The company that manages the flagship Wall Street index, the Dow Jones Industrial Average, announced a major stir on Monday evening following Apple’s decision to split its title into four. In particular, it provides for the exit of the oil giant ExxonMobil and the Pfizer laboratory.
These two groups will be replaced on August 31 respectively by the software publisher Salesforce and by the biotech Amgen, details a press release from S&P Dow Jones Indices.
ExxonMobil had been in the Dow Jones since 1928 through one of its predecessor companies, Standard Oil of New Jersey.
The Honeywell industrial group will for its part take the place of the aeronautics and defense company Raytheon Technologies.
These changes are motivated by the decision of the computer giant Apple to split its title in four.
This operation does not change the value of the group, but makes it possible to make the title less expensive per unit and thus more accessible to small shareholders.
It also has the effect of reducing the weight of the company within the index, calculated according to the price of the shares of the 30 companies it represents, and not on their market capitalization as in the S&P 500.
The changes announced Monday help minimize those changes, argues S&P Dow Jones Indices.
They also make it possible to “diversify the index by avoiding possible overlaps between companies of similar size and by adding new types of activities which better represent the American economy”, adds the company.
The selection of stocks included in the Dow Jones is not governed by a strict set of rules, but the committee that decides on its composition takes into account the reputation of the companies, their history of performance, their relationship with investors and their sectoral representation.
ExxonMobil, Pfizer and Raytheon Exit the Dow Jones - /10
The company that manages the flagship Wall Street index, the Dow Jones Industrial Average, announced a major stir on Monday evening following Apple's decision to split its title into four. In particular, it provides for the exit of the oil giant ExxonMobil and the Pfizer laboratory.