Shake-Up Coming to Dow Jones Industrial Average

Why the Changes?

According to S&P Dow Jones Indices, Apple's decision to split its stock 4:1 prompted the shifts, as the tech giant's move reduced the index's weight in the Global Industry Classification Standard Information Technology sector.

The changes announced Monday help offset this reduction. "They also help diversify the index by removing overlap between companies of similar scope and adding new types of businesses that better reflect the American economy," the unit of S&P Global said in a press release.

The last time three firms were added to the Dow was in 2013, when Visa, Goldman Sachs Group and Nike pushed out Bank of America, Hewlett-Packard and Alcoa.

The planned adjustments will not disrupt the level of the index, which ended Monday at 28,309.08 — about 4% off its Feb. 12 record of $29,551.42.

The divisor used to calculate the index — based on the components' prices on their respective home exchanges — will be revised before trading on Aug. 31 to prevent "any distortion in the index's reflection of the portion of the U.S. stock market it is designed to measure," says S&P Dow Jones Indices.