The Finch Formerly Known As Gold

1 April 2004

How now, Dow Jones?

For the first time since 1999, Dow Jones has shuffled the portfolio that makes up their oft-quoted Industrial Average.

AT&T, International Paper and Eastman Kodak, all of which have been part of the DJIA for decades, will be dropped as of the start of trading 8 April. Replacing them will be AIG, Pfizer and Verizon.

The reasoning, from Wall Street Journal managing editor Paul E. Steiger:

[The changes] recognize trends within the U.S. stock market, including the continued growth of the financial and health care sectors and the diminishing relative weight of basic materials stocks.

Adjustment factors are applied to insure that there is no numerical discontinuity when changes are made to the portfolio; it has been many years since the DJIA was determined by simply adding the prices of those thirty stocks.

Posted at 9:39 AM to Common Cents

TrackBack: 5:30 AM, 2 April 2004
» BUSINESS: New Dow from Baseball Crank
Via Dustbury, we see that the Dow Jones Industrial Average has dropped AT&T, International Paper and Eastman Kodak and added AIG, Pfizer and Verizon. The passing of AT&T, in particular, from the Dow seems like a real sign of changing......[read more]