NEW YORK, Sept. 18, 2008 (GLOBE NEWSWIRE) -- Kraft Foods Inc. (KFT) will replace American International Group Inc. (AIG) in the Dow Jones Industrial Average, effective with the opening of trading on September 22, Dow Jones & Company announced.
The 112-year-old stock index was previously changed on February 19, 2008, when two stocks out of 30 were replaced.
"We are refraining at this point from adding another stock in the financial industry because of the extremely unsettled conditions. We realize this decision leaves the Dow Jones Industrial Average under-weighted in financials, and we will address this situation in due course," said Robert Thomson, managing editor of The Wall Street Journal. The Journal's top news editor oversees the makeup of "The Dow," which Charles H. Dow created as a 12-stock index in May 1896 and today is the best-known stock-market barometer in the world.
"We are adding Kraft because the Dow Jones Industrial Average had no representation in food products. Kraft is one of the world's leading food companies," Mr. Thomson said.
John A. Prestbo, editor of Dow Jones Indexes, said, "There are no pre-determined criteria for a stock to be added or deleted, though we intend that all components be established U.S. companies that are leaders in their industries." For the sake of continuity, composition changes are intentionally rare, Mr. Prestbo said, "although this time change was forced by the effective nationalization of AIG and its very low stock price." AIG has been in the Industrial Average since April 1, 2004.
The changes won't cause any disruption in the level of the index. The divisor used to calculate The Dow from its components' prices on their respective home exchanges will be changed prior to the opening on September 22. This procedure prevents any distortion in The Dow's reflection of the U.S. stock market.
For more information, see the web site of Dow Jones Indexes at http://www.djindexes.com. The Dow Jones Transportation Average, Dow Jones Utility Average and Dow Jones Composite Average also are members of the Dow Jones Averages family.
Additions to and deletions from the Dow Jones Industrial Average do not in any way reflect an opinion on the investment merits of the companies involved.
Journalists may e-mail questions regarding this press release to PR-Indexes@dowjones.com.
Note to Editors:
About Dow Jones Indexes
A full-service index provider, Dow Jones Indexes develops, maintains and licenses indexes for use as benchmarks and as the basis of investment products. Best known for the Dow Jones Industrial Average, Dow Jones Indexes also is co-owner of the Dow Jones STOXX indexes, the world's leading pan-European indexes, and together with Wilshire Associates, provides the Dow Jones Wilshire Global Index family, which is anchored by the Dow Jones Wilshire 5000 and covers more than 12,000 securities in 61 markets. Beyond equity indexes, Dow Jones Indexes maintains a number of alternative indexes, including measures of the hedge fund and commodity markets. Dow Jones indexes are maintained according to clear, unbiased and systematic methodologies that are fully integrated within index families. www.djindexes.com
Dow Jones & Company (www.dowjones.com) is a News Corporation company (NYSE:NWS) (NYSE:NWS.A) (ASX:NWS) (ASX:NWSLV) (www.newscorp.com). Dow Jones is a leading provider of global business news and information services. Its Consumer Media Group publishes The Wall Street Journal, Barron's, MarketWatch and the Far Eastern Economic Review. Its Enterprise Media Group includes Dow Jones Newswires, Dow Jones Factiva, Dow Jones Client Solutions, Dow Jones Indexes and Dow Jones Financial Information Services. Its Local Media Group operates community-based information franchises. Dow Jones owns 50% of SmartMoney and 33% of STOXX Ltd. and provides news content to radio stations in the U.S.
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