Exxon Mobil dropped from the Dow after nearly a century

(CBS News) - Exxon Mobil, which joined the Dow Jones Industrial Average in 1928, is being removed from the blue-chip stock market index. Its replacement: enterprise software company Salesforce.com.

Also leaving the index are drug company Pfizer and airplane and defense contractor Raytheon Technologies. They are being replaced by biotech Amgen and manufacturing conglomerate Honeywell. S&P Dow Jones Indices, the company that administers the index, announced the changes, which will take place August 31, on Monday. The index provider said the changes were necessary to make up for Apple's impending stock split, which becomes effective the same day.

The Dow Jones is a stock-price-weighed index. Apple’s stock split, which will take the company’s shares to roughly $120, from $500, would have cut the Dow’s exposure to the technology sector. Monday’s changes would also help the Dow “add new types of businesses that better reflect the American economy,” the index company said.

Energy giant Exxon Mobil joined the Dow 92 years ago as Standard Oil of New Jersey, and it's the oldest member of the index. The Dow's last original member, General Electric, was removed in 2018.

Exxon Mobil was the most valuable company in the United States for 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 much of the technology sector followed.

Earlier this month, Apple’s market value topped $2 trillion, making it the first U.S. company to reach that milestone. Meanwhile, Exxon’s market value has sunk to $175 billion. The company has been plagued in part by claims that it deliberately concealed the damage that the oil it has long extracted and refined into gasoline was doing to the planet.

Oil plays a much smaller role in the U.S. economy today than it did 50 years ago. While fracking has helped revive and grow the energy sector in the U.S., demand for fossil fuels and has flatlined — and has dropped during the COVID-19 economic slowdown. In the 1980s, energy companies made up as much as a quarter of the Dow. After Exxon’s exits on Monday, energy will account for just 2% of the index.

Salesforce.com, Exxon’s replacement, sells software that allows large companies to track sales and other information. It has a market value of just under $190 billion, and its CEO Mark Benioff, who also owns Time magazine, is widely seen as one of the nation’s most influential executives.