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Major changes to the Dow: Goldman, Nike in; Alcoa, BofA out

Major changes on the way for the Dow index. Goldman Sachs, Visa and Nike are in; Bank of America, Hewlett-Packard and Alcoa are out.
Major changes on the way for the Dow index. Goldman Sachs, Visa and Nike are in; Bank of America, Hewlett-Packard and Alcoa are out.RICHARD DREW / AP

The Dow Jones Industrial Average is in for some major alterations: Goldman Sachs, Visa and Nike will be added to the bellwether index, replacing Bank of America, Hewlett-Packard and Alcoa.

S&P Dow Jones Indices, which manages the 30-stock index, said Tuesday that the move would be the first "three for three" change to the index since April 8, 2004.  

The changes will be effective with the opening of trading on September 23. The index changes were prompted by the low stock price of the three companies slated for removal and the index committee's desire to diversify the sector and industry group representation of the index.

While the Dow tinkers with its 30 components periodically, often with only modest fanfare, this one will be noticed.

Alcoa is the company that traditionally kicks off earnings season. Bank of America is the second-largest financial institution in the U.S. Hewlett-Packard has been in the blue chip index for 16 years.

The changes will cause alterations to the way the index is weighted.

Visa and Goldman Sachs will have the second- and third-highest respective weightings, according to Bespoke Investment Group.

Also, the divisor Dow Jones uses to calculate the index will change to the point where a $1 move in any stock will move the index 6.5 points, compared with the previous 7.7 points.

Along with being a target for Wall Street critics, Goldman brings heft to the index both in reputation and share value.

Stock price is what drove the three-for-three move.

"We have made some big steps in terms of improving the index," David Blitzer, managing director and chairman of the Index Committee at S&P Dow Jones Indices, told CNBC. The Dow is "price-weighted, and very low-priced stocks have very little impact."

The three stocks leaving had an average price of $15 while the new ones average $134.50.

Timing, though, was at least a little curious.

BofA was the top Dow 30 gainer in 2012, surging 109 percent, and has added another 25 percent in 2013.

The two others to leave the index have fared poorly, though.

Hewlett-Packard, long a rumored target for a Dow exit, tumbled 45 percent last year, though it has jumped 57 percent in 2013.

Alcoa is the Dow's worst performer this year, losing nearly 7 percent.

Goldman is up 25 percent in 2013, while Visa has gained about 18 percent and Nike is up more than 30 percent. 

Reuters and CNBC's Jeff Cox contributed to this report.