From Riches to Rags: GE Kicked out of DOW Industrial Average

DawgStreet's picture
Rank: Orangutan | 327

"I think it tells you that GE no longer qualifies as one of the most important companies in our country"

After more than a century of being a part of the Dow (an original member since 1907), General Electric is set to be replaced by Walgreens Boots Alliance (Walgreens' parent):

General Electric Co. will drop out of the Dow Jones Industrial Average next week, a milestone in the decline of a firm that once ranked among the mightiest of blue-chips and was a pillar of the U.S. economy.

It will be replaced by drugstore retailer Walgreens Boots Alliance Inc., the latest sign of the rise of the global consumer economy and the postcrisis boom in debt issuance that has fueled a worldwide deal-making frenzy.

With the departure of GE and the addition of Walgreens, "the DJIA will be more representative of the consumer and health care sectors of the U.S. economy," said David Blitzer, chairman of the index committee at S&P Dow Jones Indices, the company behind the Dow. "Today's change to the DJIA will make the index a better measure of the economy and the stock market."

At one point, General Electric was one of the biggest stocks on the Dow and the U.S. economy. But with the rise of tech and the fall of manufacturing, GE's fall and removal from the Dow was inevitable.

Did you expect this to happen?

Why replace GE with Walgreens? Would it not make more sense to add a tech company instead?

Do you think Walgreens is a good replacement for General Electric?

Any thoughts?

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Jun 20, 2018
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