NEW YORK (BLOOMBERG) - The dominance of technology companies has eclipsed every other story in 2020's pandemic-upended stock market. Now its forcing a reordering of the world's most famous stock benchmark.. Read more at straitstimes.com.
NEW YORK - The dominance of technology companies has eclipsed every other story in 2020's pandemic-upended stock market. Now its forcing a reordering of the world's most famous stock benchmark.
The changes mark a stunning fall from grace for Exxon, the world's biggest company as recently as 2011, whose ejection reflects the steady decline of commodity companies in the American economy. The moves represent an equally significant embrace of technology companies, whose giant rallies have frequently caused the Dow to trail other major indexes this year.
While any change to the Dow is notable, the ejection of Exxon Mobil - the world's biggest company as recently as 2011 - marks a particularly stunning fall from grace, reflecting the decline of commodity companies in the American economy. Worth US$525 billion in 2007 and more than US$450 billion as recently 2014, the stock had fallen in four of six years before 2020 and is down another 40 per cent since January. It's now worth about US$180 billion.
This is the second time a stock split by Apple has had profound consequences for the Dow average. The first was in 2014, when its 7-for-1 split lowered the price of its shares enough to make inclusion feasible. Apple's decision to do it again this year effectively lowered its sway on the price-weighted average, making the influence of technology companies too small in the eyes of the Dow's handlers.
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