JUNE 19, 2018
It’s the end of an era for General Electric. After more than a century on the Dow Jones Industrial Average, the industrial conglomerate will be replaced on the index by pharmacy chain Walgreens Boots Alliance when trading begins on June 26.
David Blitzer, managing director and chairman of the S&P Dow Jones Indices’ index committee, said in a statement:
“General Electric was an original member of the DJIA in 1896 and a member continuously since 1907. Since then the US economy has changed: consumer, finance, healthcare and technology companies are more prominent today and the relative importance of industrial companies is less. Walgreens is a national retail drugstore chain offering prescription and non-prescription drugs, related health services and general goods. With its addition, the DJIA will be more representative of the consumer and healthcare sectors of the US economy. Today’s change to the DJIA will make the index a better measure of the economy and the stock market.”
Despite the symbolic shift, the move will hardly come as a shock to GE, which has seen its position as one of the giants of corporate America decline sharply in recent years.
GE shares dropped about 1.5 per cent in after-hours trading on Tuesday following the announcement. Walgreens got a lift, rising 4.4 per cent.
Courtesy/Source: Financial Times