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Dow Jones Industrial Average changes
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After filing for bankruptcy protection, General Motors was ousted from the 30-stock benchmark Dow Jones Industrial Average (DOW) marking the end to 85 years in the Dow. Cisco Systems, the technology company that makes everything from set top boxes and wireless routers to enterprise level networking equipment was added. In a separate move, Citigroup was also replaced in the Dow by Travelers, an insurance company once part of the Citigroup empire.
The inclusion of Cisco Systems is further validation that technology is the leading industry in the US and no longer old line manufacturing. The publisher of the index says they were reluctant to remove Citigroup at the height of the financial frenzy. The Dow has come under scrutiny lately as some believe it is no longer the benchmark it once was as it became less reflective of the overall economy. These moves should stem some of that criticism.
In early stock market trading today the market seems to like the news. Cisco's stock is up nearly 4% with Travelers climbing nearly 3%.
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Tom Taylor, CPA is a fee-only, independent Financial Planner and Certified Public Accountant and can be contacted at Thoma Capital Management in Towson, MD. He is a member of NAPFA and the MACPA and AICPA.
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