How Now, Dow

The Dow Jones Industrial average will be dropping AT&T, Kodak and International Paper. Welcome Pfizer, Verizon and AIG, an insurance group. Verizon was once part of AT&T which is something like Ken Griffey, Sr. being benched in favor of his son, Junior. Reuters reports that it has happened before:

Both Verizon and SBC Communications Inc., added in 1999, were among the seven companies carved out of AT&T in an antitrust ruling in 1984. Mr. Prestbo said this is the third instance in which descendants have taken the place of broken-apart parent companies to represent their respective industries in The Dow. ExxonMobil Corp. is a combination of two descendants of Standard Oil Co. (New Jersey), broken up in 1911. Boeing Co. and United Technologies Inc. trace their lineage to United Aircraft Corp., which was split in 1934.

The Dow Jones average started in 1896 with 12 stocks. Only General Electric is still around in its original name from those halcyon days, a tribute to GE (though it has dropped out and come back as this nice historical summary from the Motley Fool points out) and the dynamic nature of the American economy.


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