Kraft Replaces AIG on the Dow Jones Industrial Average
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Dow Jones & Co. said today that food maker Kraft Foods Inc. will replace struggling insurer American International Group Inc. in the Dow Jones Industrial Average when trading begins September 22.
In a statement, the managing editor of The Wall Street Journal, Robert Thomson, said another financial company is not being added to the index because of “extremely unsettled conditions.”
Kraft was chosen because there is no food maker on the DJIA, Mr. Thomson, who oversees the makeup of the widely watched index, said. AIG is being removed as the company’s poor health prompted the Federal Reserve to provide an $85 billion emergency bailout loan. Shares of the company have plunged 83% over the last three sessions as the company faces a liquidity crunch amid the continued downturn in the credit markets.
Stocks added to the DJIA index have no set pre-determined criteria but must be established American companies that are considered leaders in their industries.
The 112-year-old index was last changed in February when two of the 30 stocks were replaced.
In morning trading, shares of Kraft rose 64 cents, or 2%, to $33.29.
