Dow average pays a price as Exxon gives way to Salesforce

The Dow Jones Industrial Average would have been decidedly better off without a change made more than six months ago. Exxon Mobil Corp., which had been in the Dow since 1928, was removed and Salesforce.com Inc. took its place. Exxon climbed 53% from Aug. 31, the date of its ouster, through Friday. Only Goldman Sachs Group Inc. and Caterpillar Inc. posted bigger gains in the period among the average’s 30 stocks, according to data compiled by Bloomberg. Salesforce, on the other hand, was the Dow industrials’ worst performer. The business-software maker fell 23% and cost the average about 400 points, or 1.3%.

Dow's newest stocks leave their predecessors behind

The Dow Jones Industrial Average’s three newest members have the potential to bolster its performance, if recent history is any guide. All three outdid their predecessors after the Dow’s components changed in June 2018, according to data compiled by Bloomberg. Salesforce.com Inc. set the pace by more than doubling, largely because of a well-received earnings report last week. Amgen Inc. and Honeywell International Inc. also gained. Among the companies they replaced, only Pfizer Inc. rose for the period. Exxon Mobil Corp. and Raytheon Technologies Corp. posted losses.

 

Apple sheds `curse of the Dow,' leads average's gain

Apple Inc. has overcome the “curse of the Dow,” according to Nicholas Colas, chief market strategist at Convergex Group LLC. This month brought a reversal for the iPhone maker, which had trailed the Dow Jones Industrial Average most of the time since being added in March 2015. As Apple moved ahead, the stock became the biggest contributor to the Dow’s gain this year, according to data compiled by Bloomberg. Colas highlighted the performance in a report Friday.

Dow Jones' components of the past 30 years

Alcoa (AA), Hewlett-Packard (HPQ) and Bank of America (BAC) will be dropped from the Dow Jones Industrial Average next week, in the biggest shakeup of the 30-stock index in almost a decade.

• Alcoa, a Dow component for 54 years, will be replaced by athletic-gear maker Nike (NKE) . Payments company Visa (V) will replace H-P, which joined the index in 1997, and securities firm Goldman Sachs Group (GS) will supplant Bank of America, which spent five years in the blue-chip benchmark.
• The Dow is a price-weighted measure, meaning the bigger the stock price, the larger the sway for a particular component, and vice versa. That is different from indexes such as the Standard & Poor's 500, which are weighted by components' market capitalizations.
• Despite the popularity of the Dow Jones Industrial Average in the press, it's a lot less significant than an add to the Russell 2000 or an add to the S&P 500, because it's just not an index that institutions benchmark to.
• Current components and live quotes https://www.cnbc.com/dow-components/