Alcoa Inc., Hewlett-Packard Co. and Bank of America Corp. will be dropped from the Dow Jones Industrial Average next week, in the biggest shake-up of the 30-stock index in almost a decade. 
 
 Alcoa, a Dow component for 54 years, will be replaced by athletic-gear maker Nike Inc. Payments company Visa Inc. will replace H-P, which joined the index in 1997, and securities firm Goldman Sachs Group Inc. will supplant Bank of America, which spent five years in the blue-chip benchmark. 
 
 The Dow undergoes major overhaul as it drops Alcoa, Hewlett-Packard, and Bank of America, and adds Goldman Sachs, Nike and Visa. This change marks the biggest DJIA change in decades. David Blitzer, managing director and chairman of the Index Committee S&P; Dow Jones Indices, joins MoneyBeat. 
 
 The Dow's Ins and Outs Changes since the late 1980s. View Graphics 
 
 For the new entrants, "it would be very hard to argue that these are three companies not worthy of inclusion," said Dan Greenhaus, chief global strategist at New York brokerage BTIG LLC. "It's a positive development in the sense that you're trying to make the index better with each passing day." 
 
 "When you go out to the bar at night, or you go home and you say 'What did the stock market do today?' the majority of people will go, 'Oh, the Dow was up 50 points, or the Dow jumped 300 points,'" Mr. Greenhaus said. "It's the number that most people, when they think of the stock market, refer to." 
 
 The changes, which will take effect with the close of trading on Sept. 20, "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," S&P Dow Jones Indices LLC, the company that oversees the Dow, said in a statement. 
 
 Chris Dieterich joins the News Hub with a look at today's market action, including breaking news about the biggest change to the Dow 30 composition in a decade. 
 
 S&P Dow Jones Indices is a unit of McGraw Hill Financial Inc. CME Group Inc. and Dow Jones & Co., a unit of News Corp that publishes The Wall Street Journal, own stakes in S&P Dow Jones Indices. 
 
 While their performance has been mixed this year—H-P is up more than 50%, while Alcoa is down about 7%—all three departing stocks have underperformed the broader stock market in recent years. Shares of New York aluminum maker Alcoa closed Monday at $8.06, down from $40 as recently as 2007. H-P, the Palo Alto, Calif., computer maker, ended at $22.27, down from $50 in 2010. Bank of America of Charlotte, N.C., finished at $14.61, down from $50 in 2007. 
 
 Goldman Sachs shares rose 3.5%, while Visa gained 3.4% and Nike added 2.2%. Alcoa's shares slipped 0.3%, while H-P dropped 0.4%. Bank of America rose 0.9%. 
 
 "We are pleased to join this historic and significant market benchmark, and remain dedicated to delivering value for our shareholders as a member of the Dow 30," a Goldman Sachs spokesman said. 
 
 In a statement, Alcoa said: "The composition of the Dow Jones Industrial Average has no impact on Alcoa's ability to successfully execute our strategy, and we remain focused on delivering shareholder value. 
 
 "This decision has no impact on our business or our strategy for providing solid returns to shareholders," Bank of America said in a statement. 
 
 A Visa spokesman didn't have an immediate comment. Representatives for H-P and Nike couldn't be reached for comment. 
 
 S&P Dow Jones said the moves won't have any effect on the level of the index, which finished Tuesday at 15191.06. 
 
 The Dow is a price-weighted measure, meaning the bigger the stock price, the larger the sway for a particular component, and vice versa. That is different from indexes such as the Standard & Poor's 500, which are weighted by components' market capitalizations. 
 
 David Blitzer, chairman of the index committee at S&P Dow Jones Indices, said the methodology for calculating the Dow allows for the companies to exit and enter without affecting the measure's level. The value following the moves will be "100% dependent on what the market does and not on these changes," Mr. Blitzer said on a conference call. 
 
 While a big change for the Dow industrials, observers say the impact on the individual stocks should be limited. That is because unlike other well-known indexes, such as the S&P 500 or the Russell 2000, relatively few index-tracking investment products follow the Dow and will need to buy or sell shares based on the changes. 
 
 "Despite the popularity of the Dow Jones Industrial Average in the press, it's a lot less significant than an add to the Russell 2000 or an add to the S&P 500, because it's just not an index that institutions benchmark to," said Phil Mackintosh, global head of trading strategy at Credit Suisse Group AG. 
 
 The Dow move is the biggest since April 2004, when American International Group Inc., Pfizer Inc. and Verizon Communications Inc. replaced AT&T Inc., Eastman Kodak Co. and International Paper Co. Numerous changes have taken place since. A year ago, insurer UnitedHealth Group Inc. replaced Kraft Foods Inc., as the global snacks company moved toward a spinoff of its North American grocery business. The committee that determines the blue-chip average's makeup said Kraft's reduced size made it unfit. 
 
 In June 2009, Citigroup Inc. was replaced by insurer Travelers Cos., and General Motors Corp. was supplanted by networking company Cisco Systems Inc. 
 
 Citigroup was recovering with U.S. government assistance from a brush with death during the financial crisis, and General Motors had just filed for bankruptcy. A successor company, General Motors Co., emerged from bankruptcy the next month. 
 
 In September 2008, Kraft Foods joined the Dow, replacing AIG following the government's decision to take a 79.9% stake in the insurance heavyweight. That February, Bank of America and Chevron Corp. had replaced Altria Group Inc., formerly known as Philip Morris Cos., and Honeywell International Inc. 
 
 —Andrew R. Johnson contributed to this article. 
 
 Corrections & Amplifications 
 
 The Dow Jones Industrial Average closed Tuesday at 15191.06, leaving it up 16% for the year to date. An earlier version of this article gave an incorrect closing figure and year-to-date performance data. 
 
 Write to Matt Jarzemsky at matthew.jarzemsky@dowjones.com 
 
 A version of this article appeared September 11, 2013, on page C1 in the U.S. edition of The Wall Street Journal, with the headline: Reshuffle of DJIA Adds Nike,Visa and Goldman. ||||| The Dow Jones Industrial Average hit its latest milestone on Wednesday: 22,000. Photo: Getty Images 
 
 The Dow Jones Industrial Average has been shattering record after record lately. Barely six months after it crossed the 20,000 mark, the Dow hit 22,000 on Wednesday morning, before pulling back slightly. It’s another milestone that might not mean much for your portfolio, but it is symbolic of the enormous bull run the market has enjoyed since 2009. 
 
 Here’s some background on the Dow and what’s driven it to such soaring heights: 
 
 What is the Dow Jones Industrial Average anyway? 
 
 The Dow is the oldest and most-widely followed U.S. stock market index, composed of 30 large public companies. Meant to represent a broad cross section of the market, the index is composed of a diverse group of blue chip companies such as Pfizer, Boeing, Coca-Cola, Goldman Sachs, Walmart, and Disney. 
 
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 How is it calculated? 
 
 The DJIA is a “price-weighted” index, which means that it is calculated by adding up the 30 companies’ stock prices and then dividing them by a magic number called the Dow Divisor. The divisor is adjusted to account for stock splits, dividends, or spinoffs, which affect the share prices of Dow components. 
 
 Because it is price-weighted, stocks with a higher price carry a greater weight in the index. For example, A 10% change in 3M’s $204 stock will add more points to the Dow than a 10% change in Cisco’s $31 stock. The S&P 500, another widely-followed index, is market-cap weighted, meaning that an equal percentage change in any of its components will have the same effect on the index’s value, regardless of stock price. 
 
 Which specific companies powered the Dow to 22,000? 
 
 In the 107 trading days since the Dow reached 21,000 on March 1, Boeing led the pack, rising 54% and adding 370 points to the index. McDonald’s and UnitedHealth Group followed, adding 189 and 172 points, respectively. IBM was the main drag on the Dow, declining 37.5% since March and costing the index 257 points. 
 
 Why did the Dow just smash through another record? 
 
 Promise of regulatory and tax reform: President Trump and the Republican party have campaigned on business-friendly policies such as a lower corporate tax rate and softer regulations. If successfully implemented, investors believe that corporate earnings will increase. 
 
 Strong economic fundamentals: Low unemployment, slow but steady GDP growth, and other economic indicators point to a still improving economic climate, encouraging optimism which leads to more investment and spending. 
 
 Low interest rates: The Federal Reserve has increased interest rates three times since December, another reason to be optimistic about the economy. Nevertheless, rates are still near historical lows, meaning that investors looking to earn a reasonable return have few options besides the stock market, driving share prices higher. 
 
 Strong corporate earnings: Companies have been earning higher profits and expect to earn more in the future as the economy improves and business and consumer spending increase. 
 
 Weakening dollar: Many of the Dow’s components have large international operations. The U.S. dollar has fallen 10% since the start of the year relative to other currencies, meaning that foreign profits are worth more in dollars and making U.S.-produced goods cheaper and more competitive abroad. 
 
 
 
 
 
 What does Dow 22k mean for me? 
 
 On the surface, not much. The number 22,000 itself is a relatively meaningless milestone and isn’t technically any different than the DJIA hitting 21,756 or 22,011. What’s relevant is the trend, and this year it’s been practically nothing but up.
– The Dow Jones Industrial Average is ditching Hewlett-Packard, Bank of America, and Alcoa, it announced today, in what the Wall Street Journal is calling "the biggest shake-up of the 30-stock index in almost a decade." The Dow will add Nike, Visa, and Goldman Sachs to replace the three departing companies. The swaps "were prompted by the low stock price of the three companies," the company that manages the Dow said in a statement, along with "the Index Committee's desire to diversify" the index. The Dow said the swap won't actually affect its current level—which, at 15063.12 is just off the all-time high it hit in August. The Dow is price-weighted, meaning components with higher share prices affect it more. The move comes on the same day as a Bloomberg report that Bank of America is planning on cutting 2,100 jobs and closing 16 offices.