Exxon Mobil Loses Place in the Dow to Software Stock
S&P Dow Jones Indices has announced the largest change to its benchmark of indices since 1928, and it appears Exxon Mobil may be losing its status as the index’s longest-serving component.
Exxon is being replaced by Salesforce, while Pfizer and Raytheon Technologies are losing in favour of Amgen and Honeywell International.
According to Raymond James, Exxon’s removal is a “sign of the times” - the company and energy sector is weakening, and it is made even more so apparent by tech stocks’ strength. Indeed, energy now makes up only 2.5% of S&P 500, compared to a large 10.89% ten years ago, while technology saw a change from 18.48% in 2010 to 28.17% today! In general terms. the tech stock gang - Apple, Microsoft, Amazon, Alphabet and Facebook are individually larger than the entire US energy sector.
“In removing Exxon from the DJIA, the index provider is clearly being reactive, and indeed accentuating the extremely negative investor sentiment on just about anything tied to oil and gas,” Raymond James notes.
The news of Exxon’s removal have resulted in a 3% shed to Exxon shares.
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