“The Dow Jones Industrial Average will change its makeup for the first time in more than four years, by deleting three stocks that were members when Eisenhower was president,” writes E.S. Browning in today’s Wall Street Journal.

“The 30-stock average is adding insurance company American International Group Inc., drug maker Pfizer Inc. and telephone-service provider Verizon Communications Inc. Those stocks replace AT&T Corp., Eastman Kodak Co. and International Paper Co.”

“The three departing stocks had been Dow stalwarts for decades. AT&T was in the industrial average from Oct. 4, 1916, to Oct. 1, 1928; it re-entered on March 14, 1939. Kodak has been a component of the Dow since July 18, 1930, and International Paper since July 3, 1956.”

“The changes to the average, which tracks the prices of blue-chip stocks, take effect when trading begins on April 8.”

“The changes won’t directly affect the value of the Dow, as the math used to calculate it will be adjusted to reflect the prices of the stocks concerned. However, the stock market yesterday began the new quarter with a small gain, partly as a result of a much stronger-than-expected report on March manufacturing activity, and partly in response to the news of the Dow’s new look.”

“The revisions to the Dow industrials weren’t provoked by any specific event, said Paul E. Steiger, managing editor of The Wall Street Journal, who oversees the makeup of the Dow Jones Industrial Average.”

“‘None of these changes was triggered by an event such as an imminent merger, which was the case in the past three instances of changes dating back to the early 1990s,’ Mr. Steiger said. ‘Rather, they recognize trends within the U.S. stock market, including the continued growth of the financial and health-care sectors and the diminishing relative weight of basic-materials stocks.’ “

“The 107-year-old Dow last changed composition on Nov. 1, 1999, when Home Depot Inc., Intel Corp., Microsoft Corp. and SBC Communications Inc. replaced Chevron Corp., Goodyear Tire & Rubber Co., Sears, Roebuck & Co. and Union Carbide Corp.”

“The performance of the four new component stocks since then suggests that being added to the widely followed barometer doesn’t necessarily herald a lasting price increase for the stocks concerned.”