Dow Jones is replacing two stocks in the Dow Jones Industrial Average.
Dow Jones is replacing two stocks in the Dow Jones Industrial Average.
The Travelers Companies is taking the place of Citigroup, and Cisco Systems is going in for General Motors. Both changes are effective with the opening of trading on 8 June 2009.
"The parlous state of GM has left us with no choice but to remove it from the Dow. A bankruptcy filing immediately disqualifies a stock regardless of a company’s history or its role as a cultural icon," says Robert Thomson, managing editor of The Wall Street Journal and editor-in-chief for all of Dow Jones. "We were reluctant to remove Citigroup at the height of the financial frenzy, but it is clear that the bank is in the midst of a substantial restructuring which will see the government with a large and ongoing stake. We genuinely hope that once the bank has refashioned itself that we will again be able to consider it for inclusion – Citigroup is a renowned institution, not only in this country, but around the world."
Thomson says the selection of Travelers, a property and casualty insurance company, is intended to restore the financials industry to full representation in the Dow.
He adds that Cisco is a fitting addition "because its communications and computer-networking products are vital to an economy and culture still adapting to the Information Age – just as automobiles were essential to America in the 20th Century."
GM ends an 83-year run as a component of the Dow Jones Industrial Average. GM was added twice, first for about a year and a half in 1915 and second on 31 August 1925. The only current component with a longer history is General Electric.
Citigroup joined the Dow on 17 March 1997 as Citicorp. Travelers merged with Citicorp to form Citigroup in 1998, creating what was then termed a "financial supermarket". Citigroup spun off Travelers in 2002.
