Aug. 25 (UPI) — The Dow Jones Industrial Average fell on Tuesday amid news three new companies will join the index next week and three others will leave as part of a shake-up led by Apple’s decision to split its stock.
The blue-chip index fell 60 points, or 0.21%, at the end of trading on Tuesday, while the S&P 500 set another new record, rising 0.36%, and the Nasdaq Composite gained 0.74%.
Apple stock fell 0.82%, after rising for six consecutive sessions as the Dow announced Salesforce.com, Amgen and Honeywell International will join the index on Monday, and Exxon Mobil, Pfizer and Raytheon will depart.
The moves were necessary after Apple’s 4:1 stock split reduced the index’s weight in the information technology sector. The switch was also done to “help diversify the index by removing overlap between companies of similar scope and adding new types of businesses that better reflect the American economy,” S&P Dow Jones Indices said Monday.
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Boeing stock also contributed to the Dow’s decline on Monday, falling 1.99%.
Other tech stocks helped to push the S&P 500 and the Nasdaq higher as Facebook gained 3.47%, Alphabet increased 1.31%, Microsoft grew 1.3 percent and Amazon closed up 1.18%.
Amgen stock rose more than 5%, as Salesforce and Honeywell gained 3%, while Exxon fell 3.22%, Raytheon dropped 1.47% and Pfizer stock slid 1.11%.
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Honeywell is the only of three companies joining the Dow that has been part of the index before. It was part of the blue chip index between 1925 and 2009.
Salesforce.com is a cloud computing solutions firm and Amgen is a biotechnology firm.
Exxon will leave the index for the first time since 1928, when it was Standard Oil of New Jersey. Defense contractor Raytheon has been listed since 1939 and Pfizer 2004.
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“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.”