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September 18, 2008
Kraft Will Replace AIG in the Dow
Sorry, Google. The winner is Kraft.
Kraft Foods Inc. will replace American International Group Inc. in the Dow Jones Industrial Average effective Monday, a further sign of the woes afflicting the insurance giant.
The change comes as the federal government late Tuesday agreed to take over the troubled insurance giant in an $85 billion bailout.
The composition of the Dow industrials was last changed in February, when Bank of America Corp. and Chevron Corp. replaced former Kraft parent Altria Group Inc. and Honeywell International Inc.
Robert Thomson, managing editor of The Wall Street Journal and overseer of the Dow's makeup, said not adding a financial company to replace AIG is prudent at this time "because of the extremely unsettled conditions." He added Kraft was added because the index has no food companies.
Kraft was effectively a member of the Dow until last year when it was spun off from Altria.
Posted by edelfenbein at September 18, 2008 10:24 AM
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