Dow Jones changes 10% of companies in shakeup
Wall street's Blue chip Dow Jones Industrial Average yesterday underwent its first shake-up for almost four years, evicting three major US companies: AT&T, Eastman Kodak and International Paper.
The three discharged companies from the key benchmark index are to be replaced with pharmaceutical Pfizer, the insurer American International group and telecom company Verizon.
The Dow, which lists just 30 companies, has come under criticism recently for being price-weighted instead of being weighted according to market capitalisation, which means a smaller firm with a high share price has more weight than a bigger more liquid company.
The 107-year-old index said the changes won't cause any disruption in the level of the index.
The divisor used to calculate the Dow from its components' prices on their respective home markets will be changed prior to the stock market's opening on April 8.
