General Electric, a member of the blue-chip index when it started and since 1907 continuously, booted in favor of Walgreens
General Electric Co. is losing an important title it has held for more than a century: Dow Jones Industrial Average component.Also at MarketWatch:
GE GE, -1.85% , which was part of the Dow Jones index DJIA, -1.15% when it was started in 1896 and had been a part of the blue-chip portfolio continuously since 1907, is being replaced by Walgreens Boots Alliance Inc. WBA, +3.70% , S&P Dow Jones Indices announced Tuesday afternoon.
“The U.S. economy has changed: Consumer, finance, health care and technology companies are more prominent today and the relative importance of industrial companies is less,” David Blitzer, managing director and chairman of the index committee at S&P Dow Jones Indices, explained in Tuesday’s announcement. “Today’s change to the DJIA will make the index a better measure of the economy and the stock market.”
GE has been removed from the index twice previously, but has been a constant presence since replacing Tennessee Coal & Iron in November 1907, the same month Oklahoma became the 46th state in the union. The other companies that were part of the index when GE entered in 1907, none of which are still members: Amalgamated Copper, American Car & Foundry, American Smelting & Refining, American Sugar, Colorado Fuel & Iron, National Lead, Peoples Gas, U.S. Rubber, U.S. Rubber 1st preferred, U.S. Steel and U.S. Steel preferred.
GE has fallen on hard times in recent years though, with a plunging stock price that broke an unwritten rule for the Dow: A component’s stock should not be worth less than 10% of the highest-priced stock in the index. GE closed at $12.95 a share Tuesday, which was less than 1/20 the price of a share of Boeing Co. BA, +1.28% .
S&P Dow Jones Indices noted that GE’s plunging stock price factored into the decision as well...MORE
What Walgreens stock replacing GE in the Dow Jones Industrial Average may mean