updated 05:15 pm EDT, Tue March 10, 2009
Google, Cisco to Dow Index
Google and Cisco are among the top companies being considered to be entered into the Dow Jones industrial average index, bumping GM and Citigroup, whose shares have recently dipped below $2 and threatened their status as blue chip stocks, or sure things in the investment world, says a Monday report. They are not alone, however, as Apple, US Steel, Goldman Sachs, Visa, Aflac and Northern Trust are other candidates, as chosen by Reuters. Likewise, analysts believe Citigroup and GM are just the most likely companies to be replaced from the Dow index. Four other stocks listed on the Dow have fallen to below $10.
The Dow Jones index is simply a "broad-based but investable measure of the U.S. stock market, intended for use as the basis of investment products," and as such has no direct affect on a company's share price, but does boost the prestige and visibility of its constituents. Also, there is disagreement about the index' relevancy in today's economic climate, with some asking if it should reflect the largest and best companies in the US or simply represent various industries as a broader picture of the US economy.
Why Apple is being placed on the list isn't specified, though the company in recent years has had significantly higher-than-average growth in the computer industry along with rapid development of its fledgling cellphone business. The company managed record quarterly performance at the end of 2008 despite the impact of the world economic crash and has typically been more financially secure than most of its larger competitors, who have been hit by plummeting business PC sales.