Kraft Foods is being replaced on Dow Jones

UnitedHealth Group Inc. will replace Kraft Foods Inc. in the Dow Jones industrial average, the first change to the 116-year-old stock benchmark since 2009.

Kraft will be removed from the Dow after deciding to spin off its North American grocery business, according to S&P Dow Jones Indices. UnitedHealth, the biggest U.S. health insurer, was chosen because it represents the growing importance of health-care spending to the U.S. economy, according to the index provider. The change will go into effect at the open of trading on Sept. 24.

"Putting UnitedHealth there makes a lot of sense," said Peter Jankovskis, who helps manage more than $3 billion at Oakbrook Investments in Lisle, Ill. "Health-care expenditures have become such a large part of the economy and particularly health insurance."

About $27.5 billion is directly indexed to the Dow Jones industrial average in the form of products such as exchange-traded funds, according to data from S&P Dow Jones Indices as of last year. Changes in the index prompt managers of those funds to buy or sell stocks to match the benchmark's adjustments.

UnitedHealth shares rose 36 cents or 0.7 percent to $54.25. Kraft slipped 20 cents, or 0.5 percent to $39.93.

The 30-stock Dow closed at 13,593.37, up 53.51 points or 0.4 percent on Friday. Among the other widely watched equity indexes, the Standard & Poor's 500 index closed at 1,465.77, up 5.78 points or 0.4 percent, while the Nasdaq composite closed at 3,183.95, up 28.12 points or 0.9 percent.

Kraft has been in the Dow since September 2008, when it replaced American International Group Inc. after the insurer nearly collapsed.