Speculation Runs High Over New Dow Jones Candidates

Speculation over new candidates to join the Dow Jones industrial average is always a bit of a horse race since adding or removing companies in the index is a relatively arbitrary choice (Dow stocks are chosen by the The Wall Street Journal, which is published by Dow Jones). Deciding who to cut from the list gets easier when shares of Dow components like Citigroup (C) and General Motors (GM) trade below $2 a share, but possible adds include a wide range of possibilities. Reuters surveys possible replacements:

• Google (GOOG)
• Cisco (CSCO)
• U.S. Steel (X)
• Goldman Sachs (GS)
• Visa (V)
• Apple (AAPL)
• Aflac (AFL)
• Northern Trust (NTRS)

Also, over at the Reuters Global Investing blog, Arzu Cevik, director at Thomson Reuters Strategic Research, mentions Apple and Google, plus a few other biotech and tech names:

• Abbot Labs (ABT)
• Amgen (AMGN)
• Genentech (DNA)
• Gilead Sciences (GILD)
• Monsanto (MON)
• Amazon (AMZN)

The last change to the Dow came in September, when AIG (AIG) was replaced by Kraft Foods (KFT).

There's no real reason for inclusion in the Dow to boost a company's share price, but as Cevik points out it's really about prestige, which can (and often does) boost volume and share prices.

Comments

[lennykor:]

I really believe that Citi and GM belong in the Dow. Their fail from their lofty heights is merely a reflection of the state of the economy. As the economy recovers and it will at some point they two will recover. If on the other hand GM files for bankruptcy, I have no problem in removing them.

Mar 10 03:48 PM

[market ace:]

Oh Boy let's replace GM with Google. That should finally make the DOW go back up. Obvioulsy some stocks need to be replaced, but it sure makes comparisons impossible and appears like it is just more manipulation in the end.

Mar 10 04:04 PM

[PeteK:]

They should also put the names of those CEOs who
get the highest pay from their companies.
That will make it lot more interesting and fair to the public.

Mar 10 11:00 PM

[brewer:]

If they actually wanted good companies on the Dow they would also remove Microsoft. They have never been innovative, and haven't grown their share price in a decade.

Apple should be the top choice for the Dow, over Google.

Mar 11 03:32 AM

[pacman1947:]

Maybe you're right, brewer -- not far off you may see this:

-- Flash News --

Sony wins takeover bid for Microsoft.

In a brilliant move while the striking was perfectly timed, Sony bought Microsoft today as the stock was about to be delisted by NASDAQ. A Sony spokesman remarked, "We really needed this one for our whole new line of internet thingies." Sony failed in an earlier takeover attempt. Cisco was the victim of a takeover by Aruba last quarter.

Microsoft was closed today for telecommuting, which was expanded to 9out of 10 day ops last month. No one was around for comment.



On Mar 11 03:32 AM brewer wrote:

> If they actually wanted good companies on the Dow they would also
> remove Microsoft. They have never been innovative, and haven't grown
> their share price in a decade.
>
> Apple should be the top choice for the Dow, over Google.

Mar 11 09:14 AM