In the biggest shake-up of the Dow Jones industrial average in nearly a decade, Goldman Sachs, Visa and Nike will join the blue-chip index, replacing three companies whose stock prices were considered too low, including Alcoa, which ends more than half a century of membership.
The three companies - an investment bank, credit card payment processor and apparel company, respectively - will also replace Bank of America Corp, Hewlett-Packard Co, along with Alcoa in the 30-stock average, the index managers said Tuesday.
The changes will take effect at the opening of trading Sept. 23, said S&P Dow Jones Indices, whose index committee makes decisions on the make-up of the average.
With the changes, the committee again passed on a chance to include Apple Inc and Google Inc, the first- and third-largest U.S. companies by market value. Apple stock trades above $500 and Google closed Monday above $888.
Google and other names were considered for inclusion but passed over in part because of their high stock prices, David Blitzer, managing director and chairman of the S&P Index Committee, told CNBC.
The Dow is still considered Main Street's view of the stock market, even though its methodology - weighting stocks by their price, rather than market value - has kept out the likes of Google or Apple, arguably two of the most important companies in the U.S. economy presently.
Even though S&P Dow Jones Indices classifies Visa Inc as a technology name, adding the nation's largest credit-card processor along with Goldman Sachs Group Inc reflects a further tilt toward financial services.
Nike Inc's addition marks the first inclusion of an apparel maker since International Shoe was replaced in 1933, according to S&P Dow Jones Indices records.
Following the announcement, Visa shares were up 2.7 percent at $183.44, Goldman rose 3.3 percent to $164.70 and Nike added 1.5 percent to $66.37 after earlier hitting $66.98, a record intraday high. The Dow was up 0.6 percent on the day.
The average, first established in 1896, includes 30 stocks, but very little money is indexed to its performance, unlike the broader S&P 500.
Funds that attempt to replicate major indexes make up a large