NEW YORK — Dow Inc. (NYSE: DOW) is going to replace DowDuPont Inc. (NYSE: DWDP) in the Dow Jones Industrial Average (DJIA) effective prior to the open of trading on Tuesday, April 2, 2019.
The Dow Inc. name is not related to the Dow Jones name, which was originally created by journalist Charles Dow, who also founded The Wall Street Journal. Charles Dow invented the DJIA index which bears his name.
The change in the index follows DowDuPont Inc.’s announcement that it is splitting into 3 companies, with Dow Inc. being spun-off effective April 2. Dow Inc. will be headquartered in Midland, MI, and will operate as a materials science solution provider. A second agricultural chemical company is expected to be spun-off in June.
Replacing DowDuPont Inc. with Dow Inc. allows the Dow Jones Industrial Average to maintain its exposure to the Materials sector. Additionally Dow is anticipated to have a similar price weight to pre spin-off DowDuPont Inc.
The change won’t disrupt the level of the index. The divisor used to calculate the index from the components’ prices on their respective home exchanges will be changed prior to the opening on April 2. This procedure prevents any distortion in the index’s reflection of the portion of the U.S. stock market it is designed to measure. The new divisors can be found in the end-of-day index level files (*.SDL) via the S&P Dow Jones Indices FTP (EDX) site beginning on Monday, April 1, 2019.
The Dow Jones Industrial Average is perhaps the most quoted stock index in the nation and made up of 30 of the nation’s top companies.
Following is a summary of the change:
|
COMPANY |
GICS ECONOMIC SECTOR |
|
|
ADDED |
Dow |
Materials |
|
DELETED |
DowDuPont |
Materials |
