Dow Jones swaps Travelers, Cisco for Citigroup, GM
By TIM PARADIS, AP Business Writer Tim Paradis, Ap Business Writer – 1 hr 36 mins ago
NEW YORK – The Dow Jones industrial average is the latest Wall Street institution to be reshaped by the financial crisis.
The stock market's best-known barometer is adding Travelers Cos. and Cisco Systems Inc., replacing Citigroup Inc. and General Motors Corp. The move comes as GM enters bankruptcy protection, a move that was widely expected.
Dow Jones said Travelers, the property and casualty insurer and one-time division of Citicorp, would replace its former parent. Cisco, which makes computer networking gear, is filling the role left by GM after 83 years as part of the Dow.
The changes to the 30-stock index take effect June 8.
The selection of Travelers helps maintain the representation of the financial industry in the index. Dow dropped insurer American International Group Inc. in September after the federal government funneled billions to the company to keep it afloat during the financial crisis. Kraft Foods Inc. replaced AIG.
The company said the change last fall left financials underrepresented in the Dow because the government has, through bailout money, become a major Citigroup shareholder and reduced its role as a publicly held company.
"We were reluctant to remove Citigroup at the height of the financial frenzy, but it is clear that the bank is in the midst of a substantial restructuring which will see the government with a large and ongoing stake," Wall Street Journal Managing Editor Robert Thomson said in a statement.
Dow Jones added Cisco "because its communications and computer-networking products are vital to an economy and culture still adapting to the Information Age — just as automobiles were essential to America in the 20th Century," Thomson said. He has the final say on changes to the index.
http://news.yahoo.com/s/ap/20090601/...dow_components