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| In this Jan. 16, 2018, file photo, the General Electric logo is displayed at the top of their Global Operations Center in the Banks development of downtown Cincinnati. / AP |
General Electric Co has lost its spot in the Dow Jones Industrial Average after over a century in the blue chip stock index, a new blow to a company that once towered over the American business landscape but is now struggling to retain its standing as an industrial powerhouse.
S&P Dow Jones Indices said on Tuesday that GE, an original member of the Dow when it was formed by Charles Dow in 1896 and a continuous member since 1907, will be replaced in the 30-component stock average by drug store chain Walgreens Boots Alliance Inc prior to the start of trading on June 26.
GE's stock slipped 1.5 percent in after-hours trading following the announcement while Walgreens jumped 3 percent.
A decade and a half ago GE was the world's most valuable public company. But it foundered in several key industrial markets in recent years, and a diversion into financial services steered it into the eye of the global financial crisis in 2008.
It now ranks as the sixth smallest member of the Dow by market value and carries the index's lowest stock price, making it the least influential component of the price-weighted average.
Faced with weak profits and calls to be broken up, the 126-year-old company is aggressively cutting costs, selling businesses and trying to strengthen its balance sheet under new managers and a new board.
Its stock has fallen nearly 80 percent from highs in 2000.
Last month, Chief Executive John Flannery warned that GE may not be able to pay its 2019 dividend.
"It was at one time perhaps one of the quintessential U.S. companies, and like others that have been taken out of the Dow, it's a reflection that they're no longer seen in that light," said Rick Meckler, a partner at Cherry Lane Investments, a family investment office in New Vernon, New Jersey. (Reuters)
