<This might have some ripples for Refinery Anode Coker suppliers – Alcoa has been target to be dropped DJ for some time. Ever since Rio Tinto took over Alcan been expecting BHP to take over Alcoa. At very least has impact for your 401K and big bump not from market but due stock price exchange CER>
The 3 swaps represent big price & sector change to DJ 30 stocks (but not S&P) since the Index is price weighted and every $1 change could represents 7 point change.
Also by dropping Alcoa the Industrial weighting DJ 30 shifts down from 22.2% to 19%. Alcoa has been target for some time now due to its low stock price & performance. While it appears Visa is financial company (credit/debit cards) replacing a HP technical company but Visa is really viewed as giant technology company focusing on payment processing. Nike was added to represent apparel industry / consumer discretionary sectors that are under-represented in DJ 30.
In the DJ exchange price wise = Goldman Sachs @ $164.7/share replaces Bank of America @ $14.64/share ; Nike at $66.37/share replaces Alcoa at $6/share; and Visa @ $183.44 replaces HP at $ 22.19/share
Expect all these stocks to see some price change – previous changes DJ 30: Sept 2012 United Healthcare replaced Kraft and in June 2009 when Travelers Co replaced Citgroup and Cisco replaced GM. And April 2004 last time 3 stocks were replaced when AIG, Pfizer, and Verizon replaced AT&T, Kodak and International Paper. UHC is up 33% since being added, Travelers is up 100% & Cisco is up 31% since replacement.
Regards
