Dow Industrials delists GM as well as Citigroup

Read More About Business

Dow Jones and Company reported Monday that it would be adding two new businesses to its industrial average. The two businesses are Travelers as well as Cisco Systems. Needless to say, when two go into the average, two have to come out.

Given the news that has occurred with GM over the past few months, it is a no brainier that GM would be cut from the average. However, Citigroup was in addition let go.

Travelers was once a subsidiary of Citigroup and will help maintain the representation of financial businesses in the average.

Citigroup has had a rather rough year with subprime lending, the credit catastrophe, and ultimately the recession taking huge cuts from Citigroup. Citigroup is the second fiscal business to be dropped from the average throughout this downturn, the first was AIG. AIG was taken off the average in September when the government took an 80% stake in the company and lent it several billion dollars in bailout money.

The Dow industrial average is made up of 30 stocks. These stocks are a gauge of the market and what the public frequently looks at to determine the health of the markets as well as the financial system. It is currently made up of (on top of Travelers and Cisco) 3M (MMM), Alcoa (AA), American Express (AXP), At&t (T), Bank of America (BAC), Boeing (BA), Caterpillar (CAT), Chevron Corporation (CVX), Coca-Cola (KO), DuPont (DD), ExxonMobil (XOM), General Electric (GE), Hewlett-Packard (HPO), The Home Depot (HD), Intel (INTC), IBM (IBM), Johnson & Johnson (JNJ), JPMorgan Chase (JPM), Kraft foods (KFT), McDonalds (MCD), Merk (MRK), Microsoft (MSFT), Pfizer (PFE), Procter & Gamble (PG), United Technologies Corporation (UTX), Verizon Communications (VZ), Wal-Mart (WMT), and Walt Disney (DIS).

The mix ups will start next Monday.

Citi has been sitting in the Dow industrial average for 12 years, when it was listed as Citicorp. It turned into Citigroup in 1998 when Travelers Group merged with Citicorp. In 2002, Travelers was spun off yet again and has been a unconnected business ever since. So, it is a bit odd that the parent company has fallen off the average and has been out performed by its subsidiary.

In reality, Travelers is taking AIG’s previously held spot in the average. The center product of both corporations is the similar; casualty insurance sales.

GM has to get its act composed to even be considered before it is listed on the average yet again. It will probably be years for the once robust auto company to see the tops of any list. However, I do believe that insolvency was a move in the correct direction. If it were left up to its own devices, GM would have been going into liquidation mode a year ago, if the state wouldn’t have stepped in. Worse, if they didn’t file for bankruptcy and couldn’t reform, the government would have lost all of our capital in the GM “gamble” and would be throwing money into a limitless pit.

Article Source: http://depositarticles.com/

Need to be familiar with more about the dow industrial average. Find out and further about Stock Investing as well.

Please Rate this Article

Not yet Rated

Click the XML Icon Above to Receive Business Articles Via RSS!

Additional Articles From - Home | Business

Our other websites
All about SEO
Beauty Tips Forum

	Print This Article
	Post Comment
	Add To Favorites
	Email to Friends
	Ezine Ready

Submit Articles
Member Login
Link Us
Submission Guidelines
Ezine Notifications
Article RSS Feeds
Sitemap

New Stuff
About Us
Developer
Good shopping portal
Link to Us
Contact Us
Privacy Policy
Terms of Service