The longest-tenured member of the iconic Dow Jones Industrial Average, ExxonMobil (ticker: XOM), is getting booted.
A corporate descendant of John D. Rockefeller’s Standard Oil, Exxon’s roots in the blue-chip benchmark trace back 92 years to 1928.
With little in the way of major economic news on Tuesday, the S&P 500 and the Nasdaq both continued to trend higher, each setting record closing highs. The Dow, with major changes coming at the start of next week, lost 60 points, or 0.2%, to finish at 28,248.
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Exxon ostracized. S&P Dow Jones Indices announced it was letting Exxon go the way of the dodo, also ditching two other components — Pfizer ( PFE) and Raytheon ( RTX) — in a move that subs out a full 10% of its 30 components.
Although not exactly an intuitive cause, the 4-for-1 stock split planned by the omnipresent Apple ( AAPL) this month is largely to blame for the changes. When Apple’s stock price is quartered on Monday, its sway in the price-weighted index will also plunge, resulting in a lower concentration in one of the market’s hottest sectors: information technology.
Pfizer will be replaced by Amgen ( AMGN), Raytheon will see its spot taken by Honeywell International ( HON), and Exxon, in a sign of the times, will be replaced by Salesforce ( CRM).
Salesforce slaying. Exxon was a stock of and for the 20th century. But it makes sense that in 2020 the Dow should include entrenched businesses in more modern fields, and customer relationship management software giant Salesforce fits the description.
CRM stock illustrated just why it was worthy of inclusion in the Dow late Tuesday afternoon: It announced revenue and earnings that blew past expectations as Salesforce benefited from the ongoing shift to online services in the pandemic. Revenue rose 29% year over year last quarter.
Shares of CRM were up as much as 12% in after-hours trading Tuesday.
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Out With the Old: Exxon Booted from Dow originally appeared on usnews.com
