Updated from 9:36 a.m. EST
The best-known stock index in the world, the
Dow Jones Industrial Average
, is getting a makeover.
Dow Jones, a unit of
, said Monday it's replacing
Bank of America
in its 30-stock industrial average.
The alterations will take effect at the open of trading on Feb. 19. The last time switches were made to the Dow Jones Industrial Average was 2004, when
American International Group
were given the slots held by
. The AT&T name came back to the index after that company was acquired by component SBC Communications, who took the AT&T name.
"The catalyst for these changes is the restructuring in progress at Altria, which will result in a much smaller and more narrowly focused company," said Marcus Brauchli, managing editor of
The Wall Street Journal
, in a prepared statement. The paper's top news editor oversees the makeup of the DJIA, which Charles Dow created as a 12-stock index in May 1896.
"As usual when we make any change we review all the stocks," Brauchli's statement said. "In doing so, we saw that the financials industry was under-represented -- notwithstanding the current turbulence -- and that the oil and gas industry's growing importance to the world economy called for another representative to join
Altria, formerly Philip Morris, has been in the industrial average since October 1985. Last year it spun off
, and now it plans to shed Philip Morris International. Altria adopted its current name in 2003.
Honeywell, Dow Jones said, is being removed because it's the smallest of the industrials in terms of revenue and earnings. "Additionally, the role of industrial companies relative to the overall stock market has been shrinking in recent years," Brauchli said.
AlliedSignal, at the time a Dow component, bought Honeywell in late 1999 and took that name for the new company. The predecessor of AlliedSignal was Allied Chemical & Dye, formed in 1920 and added to the Dow in December 1925.
Chevron has been in the industrial average twice previously. The first time, as Standard Oil Co. of California, was from February 1924 to August 1925. The company rejoined the Dow in 1930, but was replaced in November 1999. The Chevron name was taken in 1984.
Dow Jones said the changes won't cause any disruption in the level of the index. The divisor used to calculate the average from its components' prices will be changed before trading begins Feb. 19.
"There are no predetermined criteria for a stock to be added or deleted, though we intend that all components be established U.S. companies that are leaders in their industries," John Prestbo, editor of Dow Jones Indexes, said in a press release.