Exxon To Exit Dow Jones Industrial Average After More Than A Century

One of the world’s major stock indices is set to undergo some significant changes, with Exxon Mobil (XOM), defense firm Raytheon Technologies (RTN) and drug maker Pfizer (PFE) on the way out of the 30-name index of US blue chip stocks. The trio will be replaced by cloud business software provider Salesforce (CRM), and conglomerate Honeywell (HON). Apple’s (AAPL) four-to-one stock split is one reason the changes are being made, as the index is constructed based on share price rather than market cap, so the change would have dramatically cut the Dow’s technology exposure. The news broke as the Dow came within touching distance of breaking even in 2020, after adding 1.4% on Monday. Currently, the Dow is down just 0.8% year-to-date.

In merger and acquisition news, a potential deal for TikTok’s US operations once again hit headlines, after its parent company ByteDance announced it is suing the US government over an executive order from President Trump that would ban its US operations on 15 September for national security reasons – unless the firm reaches a deal to sell to an American company. The Wall Street Journal also reports that two major investors in TikTok’s parent company are helping to drive a bid by a group including Oracle (ORCL), which recently threw its hat into the ring. General Atlantic and Sequoia Capital reportedly grew concerned about not having a place in a Microsoft (MSFT) deal for TikTok, so found their own tech partner.

Energy and airline stocks soar on Covid-19 vaccine news

All three US indices started the week on a positive note, with the S&P 500 up 1%, taking its year-to-date gain to 6.2%. The energy sector led the way, adding 2.8%, with the energy equipment and services sub-sector up 4.3%. It was airline and travel stocks that topped the index in terms of individual stocks, however, with American Airlines (AAL), Carnival (CCL) and United Airlines (UAL) adding 10.5%, 10.2% and 9.9% respectively. Delta Air Lines (DAL) and Norwegian Cruise Lines (NCLH) also both posted significant gains, closing 9.3% and 7.6% higher. The rally was triggered by the weekend news that President Trump may greenlight an experimental Covid-19 vaccine ahead of the November election, which is something airlines need to happen for any form of normalcy to return. Boeing (BA) also finished 6.4% higher following the news, as the firm has been on the receiving end of order cancellations with travel demand still suppressed.

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William K. 3 months ago Member's comment

Interesting indeed.