Few companies can boast of being a component of the Dow Jones Industrial Average. The index comprises only 30 biggest US companies. Recently, this number decreased by one. General Electric was unable to maintain its place among the components of the index. The reason for it was a record plunge in its shares below the acceptable level.
Remarkably, General Electric was one of the oldest components of the Dow Jones. The first variant of the index appeared in 1884 while GE was listed in 1896. At that moment, the index comprised 12 companies. The Dow Jones continued to develop, and in 1907 the main composition of the index was formed. Since that time and until the recent moment GE was in the Dow Jones list. But the previous achievements worth almost nothing in the modern fast-developing world. It is the current good performance that matters. If there is a gap, something will fill it. Thus, the stock indices provider S&P Dow Jones Indices LLC announced that shares of the biggest US pharmacy chain Walgreens Boots Alliance will replace General Electric on June, 26.
Lately, the company’s performance has been far from great. In 2002, shares in General Electric hit the record low, and after that a continuous decline has been witnessed. For the last year GE shares plunged by 55%, showing the worst results among other DJIA companies. From the first months of 2018 to June, 20 the quotes plummeted by 26%. The share of General Electric in the Dow Jones declined to 0.5%, so the company ceased to be a significant component of the index, having no influence upon its dynamics.
