Salesforce to replace Exxon Mobil Corp in major Dow Jones shake-up

Prompted by Apple's stock split, Exxon will exit the index after 92 years

The dominance of technology companies has eclipsed every other story in 2020’s pandemic-upended stock market. Now it’s helping speed changes to the world’s most famous equity benchmark.

In the biggest reshuffling in seven years, Exxon Mobil Corp, Pfizer and Raytheon Technologies Corp. were kicked out of the Dow Jones Industrial Average, making way for Salesforce.com, Amgen Inc. and Honeywell International to enter the 124-year old equity gauge a week from today. The actions were prompted when Apple — currently 12 per cent of the 30-stock index — announced a stock split that reduced the sway of computer and software companies in the price-weighted average.

The changes mark a stunning fall from grace for Exxon Mobil that has been in the Dow in some form since 1928. The world’s biggest company as recently as 2011, whose ejection reflects the steady decline of commodity companies in the American economy. They represent an equally significant embrace of technology firms, whose giant rallies have have caused the Dow to trail other indexes this year. “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 comes as technology companies have surged past every other industry in a trend amplified by this year’s Covid 19 lockdowns. While the Dow Average is still 4.2 per cent off its February record, the tech-heavy Nasdaq 100 is almost 20 per cent above the pre-pandemic all-time high.