Citi leaves the Dow

By Felix Salmon
June 1, 2009

So Citi is being removed from the Dow, after all, to be replaced by Travelers, the insurer which got spun off from Citi in 2002 and is now worth more than its former parent.

The inclusion of Travelers makes a certain amount of sense, given that the Dow has been insurer-free since AIG dropped out. But replacing GM with Cisco is a bit weirder — could the continued exclusion of Google be a function of the personal prejudices of Rupert Murdoch? In a way I hope that it is, since that would be yet one more reason for all of us to stop looking at this silly average and start concentrating on more objective indices instead.

Update: Evan points out a very good reason not to include Google in the Dow: because the Dow is (idiotically) price-weighted, Google would have four times the weighting of any other Dow component.

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