Cisco added to DowCisco has been added to the Dow Jones Industrial Average, replacing GM. Travelers has also been added to the stock index, replacing Citigroup.
Cisco had been expected for months to replace a Dow component. The move means that Cisco, the tech bellwether with a market cap of $112 billion, is a stable and key indicator of the nation's and globe’s economy.
Quoting a statement from Wall Street Journal Managing Editor Robert Thomson, the AP said Cisco was added to the Dow because its products are "vital to an economy and culture still adapting to the Information Age - just as automobiles were essential to America in the 20th Century." It may also signal the increasing influence of tech stocks in the Dow.
GM, which had been one of the index's 30 blue chip stocks for 83 years, was removed after filing for Chapter 11 today. Citigroup was removed because it is undergoing a significant restructuring following the credit crisis, which precipitated the current economic recession.
The U.S. government will have a substantial stake in Citigroup after the restructuring.
The changes take effect June 8.