James Tidwell June 22, 2018

When Dow Jones was started in the year 1896, GE was one of its pioneer components. Now, in 2018, it is being removed from the S&P 500 Component Index.

GE, the maker of light bulbs is being replaced by Walgreens Boots Alliance in the S&P Dow Jones Indices. After performing well for 110 years, General Electric is removed from S&P due to its low performance and rising financial trouble.

The announcement made on Tuesday will remove the stock from the 30-stock index.

GE is facing some troubling moments for the past few years. There are troubles like bad deals, decreasing jobs, selling away of a stock dividend, etc.

General Electric spokeswoman says that the company will be focusing on bringing back the company to its feet. Paying back debts, selling off businesses like the railroad division, etc., are some measures taken to bring back the company to its former financial strength.

The Dow which is price-weighted will be a better measure of the shape of the economy, after the exit of GE, says the chairman, David Blitzer of the S&P index committee. The plunging price of GE is the cause for its exit, he says.

Further, Blitz adds that sectors like healthcare, tech, bank, consumer companies are playing a more crucial role in the economy.

The company to replace General Electric (GE) is Walgreens Boots Alliance Inc (WBA).

Earlier in 2015, a major change in the Dow was made, when Apple was replaced by AT&T. Now it is the turn of GE.

On Tuesday, GE saw a further 2% decrease in its share prices today, after trading hours on Tuesday. The company has been the lowest priced-share on the market. Over the past 12 months, the company stock has lost almost 55%, while in this year alone it has lost almost 25%.

James Tidwell

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