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GENERAL ELECTRIC GETS BOOTED FROM THE DOW


by Matt Egan   @MattEganCNN June 19, 2018: 6:14 PM ET

Play




GE changed our lives. Why is it struggling?




FOR THE FIRST TIME IN 110 YEARS, GENERAL ELECTRIC WILL NOT BE A MEMBER OF THE
ELITE DOW JONES INDUSTRIAL AVERAGE.

S&P Dow Jones Indices announced on Tuesday that the iconic maker of light bulbs
and jet engines will be replaced in the 30-stock index by Walgreens Boots
Alliance.



GE (GE) was an original member of the Dow in 1896 and has been in it
continuously since November 7, 1907.

Being ousted from the Dow is the latest indignity for GE, which is dealing with
a serious cash crisis caused by years of bad deals. GE has replaced its CEO,
slashed thousands of jobs and cut its coveted stock dividend in half.

Last year, GE was the worst-performing stock in the Dow, losing almost half of
its value. GE is down by another 25% this year.



"We are focused on executing against the plan we've laid out to improve GE's
performance," a GE spokeswoman said in a statement. "Today's announcement does
nothing to change those commitments or our focus in creating in a stronger,
simpler GE."

To pay down a mountain of debt, GE is selling off long-held businesses. Last
month, GE agreed to sell its century-old railroad division. GE is also searching
for a buyer for its struggling light bulb division.

Related: Inside the dismantling of GE

GE's stock plunge helped lead to its exit from the Dow. That's because the Dow
is price-weighted, meaning that GE's $13 price tag had little impact on the
index. S&P noted that GE had a weight of less than half a percentage point.

David Blitzer, chairman of S&P's index committee, noted that industrial
companies like GE are no longer as prominent in the American economy. Banks,
healthcare, tech and consumer companies play a larger role today.

"Today's change to the DJIA will make the index a better measure of the economy
and the stock market," Blitzer said.

S&P said GE will be replaced by Walgreens (WBA) on June 26.

It's the first shake-up to the prestigious Dow since 2015, when Apple (AAPL)
replaced AT&T. (T) (CNN is now owned by AT&T).

The committee that runs the Dow prefers no more than a 10-to-1 ratio between the
high and low stocks in the index. Yet the gap between GE and Boeing (BA) has
soared to more than twice that today.

GE shares dipped another 2% in after-hours trading on Tuesday.



CNNMoney (New York) First published June 19, 2018: 5:36 PM ET

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Most stock quote data provided by BATS. Market indices are shown in real time,
except for the DJIA, which is delayed by two minutes. All times are ET.
Disclaimer. Morningstar: © 2019 Morningstar, Inc. All Rights Reserved. Factset:
FactSet Research Systems Inc.2019. All rights reserved. Chicago Mercantile
Association: Certain market data is the property of Chicago Mercantile Exchange
Inc. and its licensors. All rights reserved. Dow Jones: The Dow Jones branded
indices are proprietary to and are calculated, distributed and marketed by DJI
Opco, a subsidiary of S&P Dow Jones Indices LLC and have been licensed for use
to S&P Opco, LLC and CNN. Standard & Poor's and S&P are registered trademarks of
Standard & Poor's Financial Services LLC and Dow Jones is a registered trademark
of Dow Jones Trademark Holdings LLC. All content of the Dow Jones branded
indices © S&P Dow Jones Indices LLC 2019 and/or its affiliates.

© 2021 Cable News Network. A Warner Media Company. All Rights Reserved.
CNN Sans™ & © 2016 Cable News Network.

Newsletters Contact Us Terms of Use Privacy Policy Do Not Sell Manage Cookies+
Accessibiliy & CC AdChoices
General Electric Co (NYSE: GE)
During the Trading Day 99.97 0.01 / 0.01%

FULL QUOTE ADD TO WATCH LIST



Walgreens Boots Alliance Inc (NASDAQ: WBA)
During the Trading Day 46.99 -0.84 / -1.76%

FULL QUOTE ADD TO WATCH LIST



Apple Inc (NASDAQ: AAPL)
During the Trading Day 160.58 2.68 / 1.70%

FULL QUOTE ADD TO WATCH LIST



AT&T Inc (NYSE: T)
During the Trading Day 24.13 -0.26 / -1.07%

FULL QUOTE ADD TO WATCH LIST



Boeing Co (NYSE: BA)
During the Trading Day 214.05 -0.08 / -0.04%

FULL QUOTE ADD TO WATCH LIST







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