Travelers, Cisco and the Dow 30
The changes in the Dow Jones Industrial Average surprised some on Wall Street, with Travelers and Cisco replacing Citigroup and General Motors.
Swapping in Travelers for Citigroup demonstrated a nifty sense of history, not to mention a bit of irony.
Travelers has a complicated history, but in an earlier age (1998) Travelers combined with Citibank to create Citigroup. Sandy Weill had built Travelers into a financial behemoth and he eventually took charge of the combined company. That deal contributed to the 1999 dismantling of the remaining elements of the Depression-era Glass-Steagall Act which had restricted various combinations of financial firms....MOREFrom MarketWatch:
With tech and insurance heavyweights, Dow should be more volatile
Blue-chip average could also make up gap with Nasdaq, S&P
More volatility might be in store for the price-weighted Dow Jones Industrial Average after the addition of Cisco Systems Inc., whose stock price is more than 20 times higher than General Motors Corp.'s, which it replaces.
Dow Jones Indexes is also adding Travelers Companies, whose stock is more than 10 times higher than another stock leaving the index -- that of Citigroup Inc.
"On the Dow, when you replace a stock like GM's that trades [at less than $1], with one that trades [at a much higher level], it can mean a lot more volatility," said Howard Silverblatt, index analyst at Standard & Poor's....MORE