Does the Dow truly reflect the industrial outlook?
The Dow Jones Co. shocked the financial world last week when it announced it was de-listing four of the 30 components that make up the famous Dow Jones Industrial Average. In place of these four “old economy” stocks, four “New Economy” stocks have been added. Analysts were stunned when it was announced that stalwarts Goodyear Tire and Rubber Co., Union Carbide, Sears, Roebuck and Co. and Chevron Corp. were being dumped in favor of younger service-oriented stocks primarily in the technology sector. Two of the new additions, Microsoft and Intel, are NASDAQ stocksthe first time a non-NYSE-listed stock has ever made it into the venerable Dow index. The other twoHome Depot and SBC Communicationsare consumer-oriented stocks. The recent shake-up was the cause of much debate among Wall Street analysts and news commentators as to how much the Dow Jones truly reflects the state of industry in America. Even before the entries of the tech-era stocks, some observers were already asking this questio
