General Electric out of Dow Jones, Exxon Mobil is the oldest now

The US stock market loses its century old component

General Electric has lost much of its sheen in the world. That is reflected quite amply in the way its shares have been trading for almost a year.

Over the last year, G.E.’s shares have fallen 55 percent, compared with a 15 percent gain for the Dow. The low price of G.E. shares means the company has a weight in the index of less than one-half of one percentage point.

G.E., which closed Tuesday at $12.95, has the lowest share price of any of the index’s 30 components.
So, the last original component of the US share market Dow Jones has been struck out of the list. That’s a development, that has taken many by surprise.

After all, GE has been a Dow component for almost a century. S. & P. Dow Jones Indices — which owns the Dow — suggested that the slide in G.E.’s stock price contributed to the decision to remove the company from the index
The decision is a fresh blow to General Electric, which has stumbled badly in recent years.

Last fall, John L. Flannery, the company’s new chief executive, warned that the power-generation unit was reeling. G.E. cut its dividend for only the second time since the Great Depression.

In January, G.E. surprised investors by taking a big charge and setting aside $15 billion over seven years to pay for obligations held by GE Capital, the company’s financial services unit, mainly on long-term care insurance policies.

p<> The move also is freighted with economic symbolism. With the inclusion of Walgreens Boots, the index will be more representative of the consumer and health care sectors of the U.S. economy.

Walgreens Boots Alliance’s share price is higher, and it is expected to contribute more meaningfully to the index.

After G.E.’s departure from the index, the company with the longest presence in the Dow will be Exxon Mobil, whose corporate predecessor, Standard Oil of New Jersey, joined the Dow in 1928.

G.E. was the modern-day equivalent of a technology stock, and the Dow itself was geared heavily toward the growth industries of the day such as railroads.

In the 120 years that followed, the company was often at the center of American capitalism. And as recently as the 1990s. G.E. was at times the most-valuable American company by market value.

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