The U.S. stock market closed at an all-time high on Tuesday despite historic job losses and bankruptcies from the pandemic.
The Dow Jones Industrial Average, a collection of major stocks that provide a gauge for how the markets are performing, is replacing three of its components, including its most longstanding member.
Longstanding Dow staple and oil giant Exxon Mobil, pharmaceutical company Pfizer and defense contractor Raytheon Technologies are out.
Cloud software seller Salesforce, biopharmaceutical company Amgen and manufacturing conglomerate Honeywell are in.
The removal of Exxon, which had been part of the Dow since 1928, comes amid a massive slump for the oil sector during the recession tied to COVID-19. The pandemic has dampened energy usage.
Chevrolet will be the only energy company remaining in the Dow. Other members include Walmart, Home Depot, Johnson & Johnson, Microsoft, McDonald’s, Cisco, Verizon, Visa, Nike, Goldman Sachs, Boeing and Disney.
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S&P Dow Jones Indices, which controls the index and made the announcement, said the decision was due to Apple’s decision to conduct a 4-for-1 stock split. That split would have reduced the percentage of the index devoted to technology.
“The announced changes help offset that reduction,” the organization said in a statement. “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 changes won’t alter the current value of the index when they take effect before trading begins Aug. 31, as the Dow uses a price-weighting technique to balance out the value of the components.
Follow USA TODAY reporter Nathan Bomey on Twitter @NathanBomey.
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