Alcoa dropped from Dow Jones index
NEW YORK (CNNMoney) — Nike, Goldman Sachs and Visa will be the newest members of the Dow Jones industrial average, replacing long-time components Alcoa, Hewlett-Packard and Bank of America.
The moves, announced Tuesday morning, will be effective with the start of trading on Sept. 23.
The 30 stocks in the Dow are a closely-watched benchmark for the health of the overall stock market and the U.S. economy, representing various sectors including manufacturing, technology and finance.
The index changes were prompted by the low stock price of the three companies slated for removal, according to S&P Dow Indices, which picks the components. Ironically HP is the best performing stock in the Dow so far this year, with shares up 57% year to date through Monday’s close. But that comes after several years of poor performance for all three companies.
The S&P Dow committee said it also wants to diversify the industries represented in the Index. Nike will be the only apparel company in the index, while both manufacturing and technology continue to be well represented even with the departure of Alcoa and Hewlett-Packard.
This is the first change in the composition of the Dow since insurer UnitedHealth bumped Kraft Foods from the index a year ago. That move was prompted by Kraft’s decision to spin off its North American grocery business.