ExxonMobil (XOM) - Get Report shares slumped lower Tuesday as the century-old oil major looks set to leave the Dow Jones Industrial Average following the benchmark's biggest shakeup in more than seven years.
Exxon, which less than a decade ago was considered the biggest company in the world, will leave the Dow on August 31, after nearly 100 years inside the world's most-recognizable stock index following a late Monday move from S&P Dow Jones. Drugmaker Pfizer (PFE) - Get Report as well as aerospace and defense group Raytheon, will also be turfed, S&P Dow Jones said, in favor of Amgen (AMGN) - Get Report and Honeywell (HON) - Get Report.
The shakeup comes amid a four-for-one stock split from Apple, the Dow's most influential stock, which is set to take effect prior to the start of trading on August 31.
"The index changes were prompted by DJIA constituent Apple's decision to split its stock 4:1, which will reduce the index's weight in the Global Industry Classification Standard Information Technology sector," S&P Dow Jones said in a statement. "The announced changes help offset that reduction. They also help diversify the index by removing overlap between companies of similar scope and adding new types of businesses that better reflect the American economy."
The split will reduce Apple's impact on the price-weighted average as a result, given that each dollar move represents 6.885 points of gain or decline for the benchmark. Apple will be the Dow's 17th most influential stock following the shake-up, based on current market prices and the pending four-for-one split.
Exxon shares were marked 1.25% lower in early trading at 41.70 each, a move that would extend their year-to-date decline to around 40%. Salesforce, meanwhile was marked 3% higher at $214.67 each, extending its year-to-date gain to around 32.5%..
Amgen, which will become the Dow's third-most influential stock when the changes take effect next week, was marked 4% higher at $244.92 per share, while Pfizer was marked 1% lower at $38.45 each.
Raytheon slipped 2.2% to $60.46 each, while Honeywell was marked 4.1% higher at $165.92 each.