The Dow Jones Industrial Average is undergoing changes, with two companies being added and two others being removed. Beginning Friday, Intel and Dow Inc., a materials science company, will be replaced by Nvidia and Sherwin-Williams.
The composition of the Dow Jones index reflects the US stock market, providing a snapshot of its performance at a glance. It’s a price-weighted index, meaning that higher-priced stocks can significantly impact the index. Intel’s falling stock price was seen as out of line with the semiconductor industry it represents, prompting Nvidia’s addition.
Similarly, Sherwin-Williams’ strong growth and representation of the materials industry make it an ideal candidate to replace Dow Inc., which is now exiting the index. Sherwin-Williams has experienced impressive growth over 20 years, with its stock price increasing by 25 times during this period.
The changes demonstrate that membership in the Dow Jones index can be fluid, with companies entering and leaving the index over time. While this change may not signal a major shift, it highlights the ongoing evolution of the US stock market.
Source: https://www.marketplace.org/2024/11/04/nvidia-and-sherwin-williams-to-enter-dow-jones-stock-index-as-intel-dow-exit