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Exxon out, Salesforce, Amgen, Honeywell added to Dow because of Apple stock split

Exxon Mobil, Pfizer, Raytheon to be replaced

Street view of Salesforce Tower in San Francisco.

Wallace Witkowski

Shares of Inc., Amgen Inc., and Honeywell International Inc. rallied in the extended session Monday after the S&P Dow Jones Indices shook up the Dow Jones Industrial Average by switching out three stocks for three new ones for the second time in a decade.

On the 30-stock, price-weighted Dow Average
cloud-based customer relationship-management software company Salesforce

will replace oil giant Exxon Mobil Corp.
biotech drug maker Amgen

will replace pharmaceutical company Pfizer Inc.

, and software and industrial conglomerate Honeywell

will replace defense contractor Raytheon Technologies Corp.

, S&P Dow Jones said.

After hours, Salesforce shares rose 3.8%, while Exxon Mobil shares retreated 1.6%. Similarly, Amgen shares rallied 4%, while Pfizer shares shed 1.6%; and Honeywell shares surged 3.7%, while Raytheon shares shed 3%.

S&P Dow Jones said the changes were “prompted” by Apple Inc.’s

decision for a 4-for-1 stock split, which will reduce the index’s tech-sector weighting. Apple joined the Dow back in 2015.

“The announced changes help offset that reduction,” S&P Dow Jones 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.”

For the year, as of Monday’s close, Salesforce shares are up 28% at a price of $208.46, while Exxon Mobil shares are down 40% at $42.22; Amgen shares are down 2.3% at $235.57, while Pfizer’s are down 0.9% at $38.84; and Honeywell’s are down 10% at $159.37, while Raytheon’s are down 30% at $61.88.

For its part, the Dow is off 0.8% for the year and closed up 1.4% at 28,308.46 on Monday.

“The changes won’t disrupt the level of the index,” S&P Dow Jones said in a statement. “The divisor used to calculate the index from the components’ prices on their respective home exchanges will be changed prior to the opening on Aug. 31, 2020.”

The last time the Dow experienced this sort of three-component shakeup was back in 2013, when Goldman Sachs Group Inc.
Visa Inc.

and Nike Inc.

were added.

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