Exxon Mobil (XOM, -2.9%), Raytheon (RTX, -3.1%) and Pfizer (PFE, -1.6%) are all struggling today as the stocks were shown the door from the Dow Jones Industrial Average.
The general thinking is that the stocks will lose the support of money indexed or benchmarked to the Dow. It’s more likely just a knee-jerk reaction to a negative headline, though. Yes, there is $28B indexed to the Dow 30. But there’s $11.2T indexed and benchmarked to the S&P, with index funds making up $4.6T.
In fact, the effect of losing Dow status may just be hurt pride. Looking further down the road, getting jettisoned from the index doesn’t seem to have much impact on shares. Read more…..
Chart of the Day
National Economic Council Director Larry Kudlow discusses coronavirus economic and employment recovery, U.S.-China relations and the Trump administration’s efforts to rebuild the economy, and also responds to economist Paul Romer calling him a liar.