In this April 23, 2018, file photo, the logo for ExxonMobil appears above a trading post on the floor of the New York Stock Exchange.
Exxon Mobil stock is up 156% since the Dow Jones Industrial Average dropped it from the index nearly two years ago.
Salesforce replaced the oil giant, but shares of the tech company are down 30% in that time.
Had the Dow index not shuffled out some of its companies in 2020, it would have fared better, by stock performance.
On Wednesday, Exxon Mobil stock soared to its first new record high in eight years, and now hovers around $104 — good for about a 64% gain this year alone.
Shares of the oil giant have climbed dramatically as companies across the sector have reaped massive profits amid sky-high energy prices that have been boosted further by Russia’s war on Ukraine. Exxon reported $5.48 billion in profits in the first quarter of 2022.
The Dow Jones Industrial Average, however, dropped Exxon from its index nearly two years ago, and swapped it with Salesforce. It was part of the index’s major reshuffle, which also saw Amgen replace Pfizer and Honeywell replace Raytheon Technologies.
At the time, S&P Dow Jones Indices said the moves were meant to “help diversify the index by removing overlap between companies of similar scope and adding new types of businesses that better reflect the American economy.”
But since the session before the changes went into effect on August 31, 2020, Exxon has soared about 156% while Salesforce has fallen 30%.
Had the Dow Jones Industrial Average skipped its 2020 reshuffle, the index would have beat its current performance by about 5.6% since then, and about 1.6% this year, per Yahoo Finance data.
At the time, crude prices were still recovering from the pandemic shock, which briefly sent oil into negative territory. Meanwhile, tech stocks like Salesforce were riding high as the work-from-home trend increased demand for software that aided remote collaboration.
But those trends have reversed course since COVID lockdowns have been lifted and consumers start returning to pre-pandemic habits.
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Source:: Business Insider