Yesterday marked the first day of the new Dow Jones Industrial Average, with Nike, Goldman Sachs and Visa replacing Bank of America, Hewlett-Packard, and the old stalwart Alcoa, which had been part of the Dow since 1959. The changeover is intended to be as undisruptive as possible, with the new components being weighted to keep the Dow at precisely the level it had been with the old components.
The first day of the new Dow was not so positive: The index lost nearly 50 points. All three of the new Dow stocks were down, with Goldman Sachs and Visa being the biggest percentage losers among the 30 companies. On the other hand, only 11 Dow stocks advanced on the day.
There will be other, more subtle changes on the way. For one thing, Bank of America had been the Dow company with the strongest projected earnings growth over the coming year. So all of a sudden, the Dow’s collective earnings projection has dropped significantly.
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