Cisco (CSCO) and Travelers (TRV) Replace GM and Citigroup in DJIA

Dow Jones Indexes confirmed that The Travelers Companies (NYSE: TRV) will replace Citigroup (NYSE: C) and Cisco Systems (Nasdaq: CSCO) will replace General Motors (NYSE: GM) in the symbolically important Dow Jones Industrial Average, or Dow 30.

Robert Thomson managing editor of The Wall Street Journal and editor-in-chief for all of Dow Jones said, "The parlous state of GM has left us with no choice but to remove it from The Dow. A bankruptcy filing immediately disqualifies a stock regardless of a company's history or its role as a cultural icon.

On Citi, Thomson said, "We were reluctant to remove Citigroup at the height of the financial frenzy, but it is clear that the bank is in the midst of a substantial restructuring which will see the government with a large and ongoing stake. We genuinely hope that once the bank has refashioned itself that we will again be able to consider it for inclusion – Citigroup is a renowned institution, not only in this country, but around the world."

On the selection of Travelers to replace Citi, Thomson said, "The selection of Travelers, a property and casualty insurance company, is intended to restore the financials industry to full representation in The Dow. When we removed American International Group, Inc. (NYSE: AIG) last fall, we substituted Kraft Foods, Inc. (NYSE: KFT) rather than another financial stock because the financials industry was then in great upheaval. That choice left financials underrepresented in The Dow, a deficiency we are now correcting."

Mr. Thomson said that Cisco is a fitting addition "because its communications and computer-networking 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."

Explaining why it took so long to replace both Citigroup and GM, John Prestbo, editor and executive director of Dow Jones Indexes, said, "In our judgment, the stocks until now helped the Dow Jones Industrial Average tell the daily story of the stock market. The extraordinary conditions of the severe bear market and recession kept these stocks relevant and representative for a longer period than might have been the case in more normal times."

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