NEW YORK - The Dow Jones industrial average is the latest Wall Street institution to be reshaped by the nation's financial crisis.
The stock market's best-known barometer is adding the Travelers Cos. Inc. and Cisco Systems Inc., replacing Citigroup Inc. and General Motors Corp. The move, announced yesterday by Dow Jones & Co. Inc., comes as GM entered bankruptcy protection.
Dow Jones, which oversees the industrial average, 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 Dow industrial average traces its roots to 1896. The changes to it 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., the Chicago manufacturer, replaced AIG.
Dow said it was dropping Citigroup because the government has, through bailout money, become a major Citigroup shareholder. That has reduced Citi's 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 industrial average.
Changes to the average are relatively infrequent, though GM's removal was expected because bankruptcy disqualifies a company from being part of the index.
The New Dow
Companies in the Dow Jones industrial average, effective June 8. Two new members in bold, replacing General Motors and Citigroup.
Bank of America
Johnson & Johnson
Procter & Gamble
SOURCE: Inquirer research