UnitedHealth Group, the health insurance company, will replace Kraft Foods in the Dow Jones Industrial Average, the most widely known barometer of the American stock market.
Dawn Villella | Bloomberg | Getty Images
The headquarters of United Health Group Inc., in Minnetonka, Minnesota.
S&P Dow Jones Indices, which manages the Dow industrial average, said Friday that the change will take effect at the start of trading Sept. 24. It said the change reflected the growing importance of health-care spending in the U.S. economy.
The change will not affect the level of the Dow industrials, which ended Thursday at a four-year high and is closing in on a record. The formula used to calculate the Dow industrial average is recalibrated for each stock added and dropped.
S&P Dow Jones Indices said that the change was also prompted by Kraft's plan to spin off its North American grocery business in October. Kraft was added to the Dow industrials in September 2008, when it replaced the crippled insurer American International Group.
Friday’s change is the first since June 8, 2009, when Travelers replaced Citigroup, and Cisco Systems replaced General Motors.
David Blitzer, managing director and chairman of the S&P index committee, told CNBC on Friday that the managers of the Dow industrial average "looked seriously at half a dozen stocks." He declined to name a runner-up.
"Just about everybody has called up and whispered Apple in one ear and Google in one ear," he said. He said technology stocks were well-represented in the Dow industrial average, which includes International Business Machines. Apple, the most valuable company in American history, is included in the Nasdaq Composite Index and the Standard & Poor's 500 index, a broader measure of the stock market, but not the Dow industrials.
In May, Bespoke Investment Group, which crunches numbers about the financial markets, calculated that the Dow industrial average would be above 15,000 if Apple had been added to the average in 2009.
The Dow industrials closed Thursday at 13,539.86, about 625 points shy of its all-time high, reached in October 2007.
UnitedHealth stock climbed 3 percent in before-market trading after the announcement that it was joining the Dow industrials, while Kraft shares fell.