The decision to drop GE, an original member of the Dow that has been a member of the 30-stock index continuously since 1907, marks the latest setback for a firm that once was the most valuable U.S. firm but has been hit hard in recent years by the unraveling of its finance business and competitive problems.
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.”
The company, which in the 1990s was the most valued U.S. company, has shrunk over the years. Under former CEO Jeff Immelt, the company shed its NBCUniversal media business and shrunk its GE Capital arm, which was once of the biggest U.S. lenders.
More recently, the Boston-based company struck a deal to sell its century-old railroad business, part of a plan to shed $20 billion worth of assets by the end of next year. It is also looking to sell its century-old lighting business.
Walgreens ended Tuesday’s session with a market value of $64 billion. It joins the index even though its larger drugstore rival CVS Health Corp. isn’t a member. CVS is in the process of buying health insurer Aetna Inc.
Component stocks of the Dow are selected by the index committee, a group that includes editors of The Wall Street Journal, which is published by Dow Jones & Co., a part of News Corp.
We Bring Good Things to Life
"We Bring Good Things to Life" was an advertising slogan used by General Electric between 1979 and 2003. It was designed by the advertising firm BBDO led by project manager Richard Costello, who would later go on to become head of advertising at General Electric. The slogan was designed to highlight the diversity of the products and services the company offered.
Imagination at Work
After more than 23 years, General Electric Co. has decided to dump its well-recognized slogan, "We Bring Good Things to Life," and will spend more than $100 million to launch a new campaign with the tagline, "Imagination at Work" in a major, and possibly risky, effort to overhaul the company's image.
Another Slogan Needed
Mike "Mish" Shedlock