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from Global Investing:

Who’s next for the Dow?

Arzu Cevik, director at Thomson Reuters Strategic Research, writes:

"With Citi shares trading below $1, the first time since 1970 that a “penny stock” traded on the Dow Jones Industrial Average, it is widely expected that it will be removed from the index.

"The company was added to the Dow in 1997 when it was still known as Travelers, and the last company to be removed from the Dow was AIG last September (when its stock hovered above $1) and was replaced by Kraft Foods.

"It’s also expected that General Motors may be removed from the Dow. GM shares are trading slightly above $1 and there’s speculation it may be headed toward bankruptcy.

"There are other stocks in the Dow that are now a part of Wall Street's Dollar Menu. In fact, there are currently five Dow stocks trading in the single digit range.

"Who will take their place in the Dow? Mostly likely, another company whose stock is faring better or relatively better in this recessionary environment.

"There aren’t too many of those but if I had to guess, I’d say it would have to be a company with a strong brand name and one that is viewed as influential. Also, one whose shares aren't trading in the single digits.

Money, money everywhere …except in your pocket?

There’s lots of money sloshing around the financial system these days. The Federal Reserve has established a target range of 0-0.25 percent for its key rate, bringing it closer to unconventional action to lift the economy out of a year-long recession.

From Washington, the first package aimed at rescuing the credit crisis-hit banking sector amounted to $700 billion. Treasury can use only half of that amount and it has already pledged all but $15 billion of it. The Senate has refused to pass a $14 billion rescue package for Detroit’s three major car companies last week, leaving it in the hands of the Bush administration to work out a deal.

So far, the names that are on the receiving end of all the cash — AIG, JPMorgan, Citigroup, Merrill Lynch and if a deal can be made, General Motors, Ford and Chrysler — are all very big companies.

The Fed’s latest move could help funnel some cash to the ordinary folks at the helm of the economic ship. What do you think, will any of the money flooding the financial system reach smaller companies or other borrowers? If you’re an individual looking for more cash, are you having trouble and do you think help is on the way?

Feeling squeezed?

In the past year, consumers have been battered by the housing market downturn, surging food and fuel costs, a credit crunch, and a weakening job market.

On Monday, Wall Street had its worst day since markets reopened after the Sept. 11 attacks in 2001, as Lehman Brothers filed for bankruptcy

The U.S. Federal Reserve stepped in to rescue insurance giant American International Group from bankruptcy with an $85 billion loan on Tuesday, the latest in a series of bailouts and loans for the financial and housing sectors.

And instead of quelling concerns, the AIG rescue seemed to have ignited fears that more bad news is to come.

How have you been affected by this week’s upheaval on Wall Street? Were you a victim of the Lehman bankruptcy, or has your employer been forced to downsize? How has it affected your bottom line – savings, investments, 401k?

Join the discussion on how the crunch is affecting you.