Dow kicks out Exxon; Salesforce gains spot

Exxon Mobil, Pfizer and Raytheon Technologies were kicked out of the Dow Jones Industrial Average as part of the stock benchmark’s biggest reshuffling in seven years.

Salesforce.com, Amgen and Honeywell International will enter the 124-year-old equity gauge a week from today, its overseers said. The moves were prompted when Apple Inc.’s stock split effectively reduced the weighting of technology companies in the Dow.

While any change to the Dow is notable, the ejection of Exxon Mobil — the world’s biggest company as recently as 2011 — marks a particularly stunning reordering, reflecting the steady decline of commodity companies in the American economy. Worth $525 billion in 2007 and more than $450 billion as recently 2014, the stock had fallen in four of six years before 2020 and is down another 40 percent year to date.

“Those changes are a sign of the times — out with energy and in with cloud,” said Chris Zaccarelli, chief investment officer for Independent Advisor Alliance.

The latest reshuffling is more testament to the ascent of technology companies, a trend amplified by this year’s Covid 19 lockdowns. While the Dow average is still 4.2% off its February record, the techheavy Nasdaq 100 is almost 20% above the prepandemic all-time high.

Founded in 1999, Salesforce was one of the bestperforming stocks of the bull market following the global financial crisis, rising 27-fold since March 2009. Amgen is among the world’s biggest biotechnology companies with a market value of about $137 billion, though it’s replacing a company — Pfizer — that is about $90 billion larger.