AIG, Verizon and Pfizer will be new additions to Dow

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The Independent Online

American International Group, Verizon Communications and Pfizer will be added to the Dow Jones Industrial Average, reflecting the growing importance of finance and health care to the economy and stock market.

American International Group, Verizon Communications and Pfizer will be added to the Dow Jones Industrial Average, reflecting the growing importance of finance and health care to the economy and stock market.

Eastman Kodak Co, International Paper Co and AT&T Corp - the average's three smallest companies by market value - will be removed from the 107-year-old benchmark in its first overhaul in more than four years. These changes will be effective from the opening of trading on 8 April, Dow Jones said.

The changes illustrate the evolution of the country's economy away from the production of machines and raw materials such as paper, said investors such as Janna Sampson, a money manager at OakBrook Investments LLC, based in Lisle, Illinois.

"The US economy is more service-oriented," said Ms Sampson, whose firm manages $1.2bn (£646m) and owns Pfizer shares. The changes make the Dow "look more like the broader market and broader economy", she said.

Shares of the added companies may receive a boost as money managers who track the average buy shares. More than $20bn in investments are tied directly to the benchmark's performance, said Sybille Reitz, a Dow Jones spokeswoman.

That amount includes exchange-traded funds such as the Diamonds Trust, which had $7bn in assets as of 10 February, as well as stock-index futures.

Dow Jones charges licensing fees to exchanges and financial companies that create investment products based on the average.

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