NEW YORK (
(GS - Get Report)
is joining the
Dow Jones Industrial Average
amid a reshuffle of the index that also includes the addition of
(V - Get Report)
and the removal of
Bank of America
(BAC - Get Report)
(HPQ - Get Report)
(AA - Get Report)
The additions and deletions to the Dow Index were prompted by the low share prices of firms being removed and the Index Committee's "desire to diversify the sector and industry group representation of the index," Standard & Poor's said in a statement. S&P, a subsidiary of
, co-owns rights to the Dow Jones Indices alongside
, a unit of
The change in firms listed on the 30-member index will occur at the close of trading on Sept. 20.
The addition of Goldman Sachs to the Dow indicates it, along with
, will be the standard bearer for Wall Street earnings.
was removed from the Dow in 2009 after the firm nearly failed and was bailed out by the government. Bank of America, having undergone a similar white knuckle ride through the crisis, will also now be leaving the index.
, the top mortgage lender in the U.S., derives little of its revenue and profit from Wall Street trading and investment banking activity.
Goldman's addition to the Dow Index will also come just as Warren Buffett-run
builds a stake in the firm
. Buffett will be converting millions of warrant contracts that he received when making a crisis-time preferred share stake in Goldman Sachs into what appears to be about a
$2 billion stock holding
in the investment bank that would represent roughly 2.5% of its outstanding shares.
For HP, its removal from the Dow further underscores pressure the world's leading PC-maker has faced amid the rise of mobile devices such as smartphones and tablets. Alcoa, strained by mistimed acquisitions, heavy debts and macroeconomic headwinds, will also be leaving the Dow after an over 50-year time as a bellwether for the index. Alcoa is usually the first Dow component to report its quarterly earnings.
Written by Antoine Gara in New York