Exxon Mobil, Pfizer removed from Dow Jones Industrial Average; Salesforce, Honey

[Hydrogen]

The Dow Jones Industrial Average, a collection of major stocks that provide a gauge for how the markets are performing, is replacing three of its components, including its most longstanding member.

Longstanding Dow staple and oil giant Exxon Mobil, pharmaceutical company Pfizer and defense contractor Raytheon Technologies are out.

Cloud software seller Salesforce, biopharmaceutical company Amgen and manufacturing conglomerate Honeywell are in.

The removal of Exxon, which had been part of the Dow since 1928, comes amid a massive slump for the oil sector during the recession tied to COVID-19. The pandemic has dampened energy usage.

Chevron will be the only energy company remaining in the Dow. Other members include Walmart, Home Depot, Johnson & Johnson, Microsoft, McDonald's, Cisco, Verizon, Visa, Nike, Goldman Sachs, Boeing and Disney.

S&P Dow Jones Indices, which controls the index and made the announcement, said the decision was due to Apple's decision to conduct a 4-for-1 stock split. That split would have reduced the percentage of the index devoted to technology.

"The announced changes help offset that reduction," the organization said in a statement. "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."

The changes won't alter the current value of the index when they take effect before trading begins Aug. 31, as the Dow uses a price-weighting technique to balance out the value of the components.

https://www.usatoday.com/story/money/2020/08/25/exxon-pfizer-dow-jones-industrial-average-salesforce-djia/5630916002/

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Exxon mobil and pfizer are such staple assets, big sprawling multi nationals. Its surprising to see them cut from the DOW average.

Does this mean no one wants pfizer's 4th booster shot?

Pfizer CEO says a fourth booster shot is 'necessary' to protect against COVID-19

Pfizer CEO Albert Bourla said it will be necessary to receive an additional booster shot in the future.

During an interview on CBS's "Face the Nation on Sunday, host Margaret Brennan asked if a fourth booster shot is needed.

"It is necessary, a fourth booster right now," Bourla responded. "The protection that you are getting from the third, it is good enough, actually quite good for hospitalizations and deaths."

https://www.msn.com/en-us/health/medical/pfizer-ceo-says-a-fourth-booster-shot-is-necessary-to-protect-against-covid-19/ar-AAV0P5r

There have been past discussions on cryptocurrency based indexes which might learn from this trend. In the past I favored independently created indexes, over ones regulated by industry personnel.

This could signal the demise of america's crude oil industry. Whereby wind or solar based energy stocks might later be included in the DOW to fill the vacuum created by exxon's departure. The attempted explanation invoking apple's stock split didn't fit known DOW criteria that I know of. Which makes the move seem more arbitrary.

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[jackg]

It's strange to see oil extractors still be quite slumped - even now I don't think many have recovered that well since the pandemic.

It was probably a good idea to sell Pfizer around now in favour of the other one. There's probably an issue of Pfizer getting too much money from selling covid vaccines too and getting too used to that for when a 4th dose of the vaccine probably won't be required until the flu one is (by that time, some governments might seek to make their own anyway - especially if fewer countries want it).

[stompix]

Exxon mobil and pfizer are such staple assets, big sprawling multi nationals. Its surprising to see them cut from the DOW average.

Nobody is surprised. The change happen in 2020!
https://www.cnbc.com/2020/08/24/salesforce-amgen-and-honeywell-added-to-dow-in-major-shakeup-to-the-average.html

And it was triggered by Apple's stock split and at that time the complete meltdown in the energy sector in the case of Exxon, at that moment their shares were around $43, down from over $70 on average in 2019 and not even compared to the right now price of $81, same for Raytheon. Honeywell by that time had almost completely recovered.

[adaseb]

 You posted this and I almost thought I had Alzheimer’s or something because this seemed like it happened a long time ago. I kept reading and reading and finally it all made sense. This happened back in 2020, why would you post this today.

The complete opposite is happening actually. Oil stocks are doing very well. Keep in mind the Dow is only 30 stocks. Typically blue chips.

I don’t think it’s a great measure because there just isn’t enough stocks in that index to be honest. A better index is the SP500 which has 500 companies. Nasdaq is not good either because it’s more geared towards the technicals.