Jim Cramer Says Dow Changes Show Sun Setting on ExxonMobil
Well, the upcoming Apple stock split is forcing the Dow to make some changes.
S&P Dow Jones Indices said in a statement that ExxonMobil will be replaced by Salesforce.com, Pfizer will be replaced by Amgen, and Raytheon Technologies will be replaced by Honeywell International.
“The index changes were prompted by DJIA constituent Apple Inc.'s decision to split its stock 4:1, which will reduce the index's weight in the Global Industry Classification Standard (GICS) Information Technology sector. The announced changes help offset that reduction,” S&P Dow Jones Indices said in a statement. The changes “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 changes won’t disrupt the level of the index,” according to the statement. The divisor used to calculate the index from the components’ prices “will be changed prior to the opening on Aug. 31. This procedure prevents any distortion in the index’s reflection of the portion of the U.S. stock market it is designed to measure.”
Now, Apple's stock split will take effect at the end of the trading day on Friday, Aug. 28. The index changes become effective prior to the opening of trading on Monday, Aug. 31, according to the statement.
Watch: Why Apple Stock Split Could Matter
So, what does Jim Cramer think about this change and is it actually important for investors to pay attention to?
Cramer says the sun is setting on ExxonMobil (XOM) - Get Report as it rises on Salesforce (CRM) - Get Report. Watch more on the digitization of the Dow in the video above.
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