JUPITER, FL (Oct. 26, 1999) -- The Dow Jones Industrial Average (DJIA) made a bold but long-awaited leap into the 21st century today when it announced that it will add Microsoft (Nasdaq: MSFT), Intel (Nasdaq: INTC), Home Depot (NYSE: HD), and SBC Communications (NYSE: SBC) to the venerable index on November 1.

With a swift backhand, it is giving Sears (NYSE: S), Chevron (NYSE: CHV), Good Year Tire (NYSE: GT), and Union Carbide (NYSE: UK) the boot. Good-bye, old friends, it was lovely to have you on the Dow, but those days are gone -- probably forever.

The Dow Jones Industrial Average has been roundly criticized for not including some of the most valuable and fastest-growing companies in the world on its -- some said -- antiquated index. Over two years ago, in March of 1997, the board managing the Dow made a change in the index that was seen as a step in the right direction, but not a complete step. Hewlett-Packard (NYSE: HWP) was added to the Dow.

Hewlett-Packard is a large tech-monster, to be sure, but it is not Microsoft or Intel. Therefore, the 1997 change was viewed as a compromise because, some thought, the managers of the Dow didn't want to legitimatize a competitor, the Nasdaq National Market, by adding Nasdaq stocks to the Dow average. Well, for the first time, now it has. The Nasdaq has been selling itself as "The stock market for the next 100 years," and it seems that the managers of the DJIA finally agree. The 21st century will be dominated by technology leaders, and the Dow Jones Industrial Average couldn't afford, for its own sake, to ignore them.

Kicking out "20th century" companies, the 1997 change in the Dow booted Bethlehem Steel (NYSE: BS), Woolworth, Westinghouse Electric, and another oil giant, Texaco (NYSE: TX). With Chevron's impending ousting next week, only Exxon (NYSE: XON) remains on the Dow to represent oil conglomerates. Wal-Mart (NYSE: WMT) and what is now Citigroup (NYSE: C) were also added in 1997, alongside the additions of Johnson & Johnson (NYSE: JNJ) and Hewlett-Packard.

What today's news means for the Drip Port is even more visibility and index-buying for our lead stock, Intel. Intel is already a component in the S&P 500 and various Nasdaq indices, so it is held by all the funds that mirror these indices. Of course, Intel is also held on its own merit in hundreds if not thousands of managed mutual funds. Now it will be held in all funds that mirror the Dow Jones Industrial Average as well. The news of its addition to the still-most-esteemed index in the world, along with the prospect of even more buyers for the stock, sent Intel and the other three Dow "winners" higher this morning.

If we were pitifully delusional and lacked any grasp of reality (well, that may describe Brian, come to think of it), we might claim that the people managing the Dow industrials were "following" us here at Drip Port. Johnson & Johnson was placed on the Dow in 1997, and now Intel joins its ranks. Plus, we believed that Home Depot and SBC Communications were very strong Drip Port candidates -- now they're on the Dow. As for Microsoft: We would have considered it, were it a possibility. Maybe Microsoft's addition to the Dow will cause it to finally consider implementing a direct investment plan. I believe it will be the only company on the index without one.

The DJIA doesn't change its components often, so the past three years have been incredibly active with eight stock swaps, perhaps a sign of our quickly changing times. The 30 stocks on the Dow Jones Industrial Average, as of November 1, will be:
AlliedSignal (ALD)
Alcoa (AA)
American Express (AXP)
AT&T (T)
Boeing  (BA)
Caterpillar (CAT)
Citigroup (C)
Coca-Cola Co. (KO)
DuPont (DD)
Eastman Kodak Co. (EK)
Exxon (XON)
General Electric Co. (GE)
General Motors Corp. (GM)
Hewlett-Packard (HWP)
Home Depot (HD)
Intel (INTC)
International Paper (IP)
J.P. Morgan & Co. (JPM)
Johnson & Johnson (JNJ)
McDonald's (MCD)
Merck & Co. (MRK)
Microsoft (MSFT)
Minnesota Mining & Manufacturing Co. (MMM)
Philip Morris Cos. (MO)
Procter & Gamble Co. (PG)
SBC Communications (SBC)
United Technologies Corp. (UTX)
Wal-Mart Stores (WMT)
Walt Disney Co. (DIS)
Moving sharply away from the mentality that a Dow stock should pay a meaningful dividend, Microsoft pays no dividend, and the other three new additions arrive to the index with the lowest dividend yields on the list, at 0.30%, 0.20%, and 0.10%. Welcome to the 21st century. There will be no free lunch!

Today we were supposed to take a fresh look at International Flavors and Fragrances (NYSE: IFF), but news of Intel being added to the Dow was worthy of a sharp detour. Tomorrow we'll sniff around, ahem, International Flavors and Fragrances again. To talk shop in the meantime, please visit the Drip Companies board.

Related Links:
Dow Jones Indexes Web site
Drip Basics board
Drip Companies board