Hewlett-Packard Shares Dropped From Dow Jones Industrial Average
HP has been dropped from the Dow Jones Industrial Average, the 116-year-old list of 30 industrial stocks that is considered a fundamental indicator of the world economy. It was the biggest shake-up in a decade for the Dow, as Alcoa and Bank of America were also dropped in order to make way for Nike, Visa and Goldman Sachs.
The move brings to an end HP’s 16-year run as a Dow component. I had heard rumors for about a year that this might happen, especially during the period when its shares were trading at levels not seen since 2005. Ironically, HP’s poor performance last year paved the way for it to be one of the best stocks on the Dow to own this year. Before today, HP shares had risen 57 percent since the close of 2012.
In a statement, S&P Dow Jones Indices, the division of the McGraw-Hill Companies that maintains the index, said the changes were “prompted by the low stock price of the three companies slated for removal and the Index Committee’s desire to diversify the sector and industry group representation of the index.”
Other tech companies included on the Dow are IBM, Cisco Systems, AT&T, Microsoft and Verizon.
HP shares are down by slightly less than one percent in early trading this morning. As of 9:35 am ET, the shares had fallen to $22.17, or 19 cents.
Update: A spokesman for HP responded to AllThingsD with this statement: “HP remains confident that we are making progress in our turnaround. We have delivered financial performance in line with or better than our expectations throughout this fiscal year, and remain focused on delivering shareholder value. We are already seeing significant improvement in our operations, we are successfully rebuilding our balance sheet, our cost structure is more closely aligned with our revenue and we have reignited innovation at HP.”