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Why the Dow Jones shook up its members

The Dow Jones Industrial Average announced a major shakeup on Monday after the market closed — it booted Pfizer, Raytheon Technologies and ExxonMobil, the oldest member of the index, having joined in 1928.

What happened: Salesforce, Amgen and Honeywell will replace those companies to "help diversify the index ... and adding new types of businesses that better reflect the American economy," S&P Dow Jones Indices said in a note announcing the changes.


  • The new companies join the Dow on Aug. 31.
  • GE, the last original member of the Dow, was removed two years ago

Driving the news: The changes seem more reflective of a desire for better-performing stocks than more accurate representation of a changing U.S. economy — the Dow will actually have a lower percentage of tech after the additions.

  • Because the Dow is a stock-price-weighed index, Apple's four-to-one stock split would have reduced the Dow's weighting of tech stocks from 27.6% to 20.3%.
  • “By adding Salesforce, you can come back to 23.1% of the Dow being in technology,” Howard Silverblatt, senior index analyst at S&P Dow Jones Indices, told CNBC.

Reality check: The Dow was designed to measure the strength of the U.S. stock market and economy, but in recent years it has been left in the dust by the tech-heavy Nasdaq.

By the numbers: Over the last five years, the Nasdaq has produced almost double the Dow's gain (151% vs. 78%) and over the last year it has returned nearly five times what the Dow has (47% vs. 10%), per FactSet.

  • Year to date, the Nasdaq has risen just under 27% while the Dow remains underwater for 2020.
  • The Nasdaq 100, which includes the 100 largest non-finance stocks in the index, is up 33% this year.

Between the lines: Despite recently becoming a net oil exporter, U.S. oil companies' stocks have fared poorly and indexes excluding energy and oil names have tended to outperform those that do include them.

  • Energy companies made up as much as a quarter of the Dow in the 1980s, and Exxon remained the most valuable company in the U.S. through much of the early 2000s and as recently as 2011, when it hit a market value of just over $400 billion.
  • Apple overtook Exxon in 2012, and today has a market cap over $2 trillion while Exxon's market cap has sunk to $175 billion.
  • With Exxon's exit on Monday, energy will account for just 2% of the Dow.

The bottom line: Roughly $31.5 billion of assets are benchmarked to the Dow, and $28.2 billion of passively managed funds, compared to $11.2 trillion and $4.6 trillion for the S&P 500, according to Bloomberg.

U.K. clears Pfizer-BioNTech coronavirus vaccine for mass rollout

The United Kingdom became on Wednesday the first Western country in the world to license the Pfizer/BioNTech COVID-19 vaccine for widespread use.

What they're saying: "Today’s emergency use authorisation in the UK marks a historic moment in the fight against COVID-19," said Albert Bourla, the chairman and chief executive officer of Pfizer, per the Guardian.

  • "This authorisation is a goal we have been working toward since we first declared that science will win, and we applaud the MHRA for their ability to conduct a careful assessment and take timely action to help protect the people of the UK."

Editor's note: This a breaking news story. Please check back for updates.

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Details: "I'm not going to make any immediate moves, and the same applies to the tariffs," Biden said. He plans to conduct a full review of the current U.S. policy on China and speak with key allies in Asia and Europe to "develop a coherent strategy," he said.

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Why it matters: The Capitol has been closed to public tours since March. Work over the holiday season comes as U.S. coronavirus cases spike, Americans beg for more pandemic assistance and food lines grow.

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Why it matters: Speculation over Barr's fate grew on Tuesday, with just 49 days remaining in Trump's presidency, after Barr gave an interview to the Associated Press in which he said the Justice Department has not uncovered evidence of widespread fraud that could change the election's outcome.

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CDC to cut guidance on quarantine period for coronavirus exposure

The CDC will soon shorten its guidance for quarantine periods following exposure to COVID-19, AP reported Tuesday and Axios can confirm.

Why it matters: Quarantine helps prevent the spread of the coronavirus, which can occur before a person knows they're sick or if they're infected without feeling any symptoms. The current recommended period to stay home if exposed to the virus is 14 days. The CDC plans to amend this to 10 days or seven with a negative test, an official told Axios.

  • The CDC did not immediately respond to a request for comment.

CDC panel: COVID vaccines should go to health workers, long-term care residents first

Health-care workers and nursing home residents should be at the front of the line to get coronavirus vaccines in the United States once they’re cleared and available for public use, an independent CDC panel recommended in a 13-1 emergency vote on Tuesday, per CNBC.

Why it matters: Recent developments in COVID-19 vaccines have accelerated the timeline for distribution as vaccines developed by Pfizer and Moderna undergo the federal approval process. States are preparing to begin distributing as soon as two weeks from now.

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