- Only 3.6% households in India go in for cashless transactions: SurveyWith Google Android plateauing, can Microsoft Windows OS take advantage?Apple Inc expected to launch iPhone 5S, iPhone 5C tomorrowDow Jones announces biggest shake-up in a decade as Goldman Sachs, Visa and Nike join index
In the biggest shake-up of the Dow Jones industrial average in nearly a decade, Goldman Sachs, Visa and Nike will join the storied 30-stock index, with Bank of America, which just two years ago was the largest U.S. bank by assets, one of the names exiting the Dow.
The three newcomers - an investment bank, credit card payment processor and apparel company, respectively - will also replace Alcoa, in the index since 1959, and Hewlett-Packard Co.
The changes will take effect at the opening of trading September 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.
"We looked at a handful above $200, Google and Apple among them," said David Blitzer, managing director and chairman of the S&P Index Committee.
"Those are obviously well-known, blue-chip, global companies. Both won't work in the Dow because of their price."
The Dow, created in 1896, is still considered Main Street's view of the stock market, even though its method of weighting stocks by price, rather than market value has kept out names like those two, among the most important U.S. companies, because of the outsized influence the stocks would have on the average.
Blitzer said S&P Dow Jones Indices has discussed changes to its methodology and would likely talk about it again.
"It's the most recognizable index in the world, but there's almost no money in it," said Dave Nadig, President of ETF analytics at IndexUniverse LLC.
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.
Bank of America's run in the Dow was not one for the history books. The stock joined the index in February 2008, just a few months into what became the worst U.S. recession since the Great Depression.
The stock is down more than 65 percent since it joined the Dow.