The shares of Salesforce.com, Amgen and Honeywell will replace those of Exxon Mobil, Pfizer and Raytheon Technologies respectively in Dow Jones 30 stock listed. The implementation will become effective before the start of trading on August 31.
The shares of Amgen Inc (NASDAQ: AMGN), Salesforce.com Inc (NYSE: CRM), and Honeywell International Inc (NYSE: HON) will become part of the Dow Jones Industrial Average in a major shakedown that has stirred the ejection of three other firms. The new additions will become effective before the market opens on Monday, August 31.
In joining the 30 stock index, Salesforce (CRM) will replace Exxon Mobil Corporation (NYSE: XOM), Amgen (AMGN) will replace Pfizer Inc (NYSE: PFE) while Honeywell (HON) will replace Raytheon Technologies Corp (NYSE: RTX)
The shakeup came after Apple Inc’s (NASDAQ: AAPL) decision to enact a 4-for-1 stock split, which would significantly reduce the benchmark’s exposure to the information technology sector. As Howard Silverblatt, a senior index analyst at S&P Dow Jones Indices told CNBC, Apple’s influence on the Dow which caused a plunge in the index has to be balanced. In his words:
“Basically Apple – by itself – took the technology [weighting] within the Dow down from 27.6% to 20.3%. It’s a significant decline, By adding Salesforce, you can come back to 23.1% of the Dow being in technology.”
With Apple’s intention to implement the 4-for1 stock split, the influence of the stock as the most ranking stock on the Dow will be reduced bringing it down to the 17th place. Following its demotion, the UnitedHealth Group Inc (NYSE: UNH) will step up as the most weighted stock on the dow.
The announcement as CNBC reported shocked Wall Street veterans particularly with the iconic stocks that are being ejected. “I’m surprised by the news as energy still powers the world but we know how out of favor it is,” said Peter Boockvar, chief investment officer at Bleakley Advisory Group. “I’m not sure there is much difference between PFE and Amgen nor Honeywell and Raytheon.”
While the enlistment will serve as Honeywell’s readdition since it was removed back in 2008, the eviction will be the first for Exxon Mobil, that’s being on the Dow for about 100 years.
Benjamin Godfrey is a blockchain enthusiast and journalists who relish writing about the real life applications of blockchain technology and innovations to drive general acceptance and worldwide integration of the emerging technology. His desires to educate people about cryptocurrencies inspires his contributions to renowned blockchain based media and sites. Benjamin Godfrey is a lover of sports and agriculture.
