The Dow Jones Industrial Average is going to look a little bit different from now on: The venerable index has shedded three of its most sluggish performers in favor of three more dynamic, contemporary-feeling stocks. Gone are Alcoa, Hewlett-Packard, and Bank of America. Coming in are Nike, Visa and Goldman Sachs. The change takes effect on September 20.
This could have a strong impact on the Dow's performance. The Dow is weighted by stock price, not market cap, which means that Visa and Goldman Sachs - both trading above $165 a share- will become the second- and third-most impactful stocks on the index. The three stocks removed were the three Dow components with the lowest share prices.
Hefty share prices are the reason important stocks like Apple and Google are not part of the Dow. Trading at more than $500 a share, each of them would throw the index completely out of whack.
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