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August 25, 2020 08:25 pm

Salesforce To Join Dow Jones, Replacing Exxon, As Tech Rises, Energy Falls

jmcbain writes: The benchmark Dow Jones Industrial Average, a selection of 30 companies that aims to represent U.S. industries at large, is going to have its largest change in seven years. Notably, Salesforce will replace Exxon on the DJIA (and Amgen and Honeywell will replace Pfizer and Raytheon), marking the end of Exxon's 92-year stay on the index. CNBC notes that Exxon's removal is a sign of the times, "as the company -- and energy sector broadly -- falters, a weakness made all the more apparent by strength in technology names." Analysts observe that "five tech stocks -- Apple, Microsoft, Amazon, Alphabet and Facebook -- are individually larger than the entire U.S. energy sector." But why is this change happening right now? It's apparently due to Apple's upcoming 4-for-1 stock split on August 31, which will significantly reduce the DJIA's exposure to the technology sector. "Basically Apple -- by itself -- took the technology [weighting] within the Dow down from 27.6% to 20.3%. It's a significant decline," Howard Silverblatt, senior index analyst at S&P Dow Jones Indices, told CNBC. "By adding Salesforce, you can come back to 23.1% of the Dow being in technology."

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