This Day On The Street
Continue to site
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Goldman Sachs: Wall Street's New Dow Component

NEW YORK ( TheStreet) -- Goldman Sachs (GS - Get Report) is joining the Dow Jones Industrial Average amid a reshuffle of the index that also includes the addition of Visa (V - Get Report) and Nike (NKW) and the removal of Bank of America (BAC - Get Report), Hewlett Packard (HPQ - Get Report) and Alcoa (AA - Get Report).

The additions and deletions to the Dow Index were prompted by the low share prices of firms being removed and the Index Committee's "desire to diversify the sector and industry group representation of the index," Standard & Poor's said in a statement. S&P, a subsidiary of McGraw-Hill (MHP), co-owns rights to the Dow Jones Indices alongside CME Group and Dow Jones, a unit of News Corp (NWSA).

The change in firms listed on the 30-member index will occur at the close of trading on Sept. 20.

The addition of Goldman Sachs to the Dow indicates it, along with JPMorgan (JPM), will be the standard bearer for Wall Street earnings. Citigroup (C) was removed from the Dow in 2009 after the firm nearly failed and was bailed out by the government. Bank of America, having undergone a similar white knuckle ride through the crisis, will also now be leaving the index. Wells Fargo (WFC), the top mortgage lender in the U.S., derives little of its revenue and profit from Wall Street trading and investment banking activity.

Goldman's addition to the Dow Index will also come just as Warren Buffett-run Berkshire Hathaway (BRK.A) builds a stake in the firm. Buffett will be converting millions of warrant contracts that he received when making a crisis-time preferred share stake in Goldman Sachs into what appears to be about a $2 billion stock holding in the investment bank that would represent roughly 2.5% of its outstanding shares.

For HP, its removal from the Dow further underscores pressure the world's leading PC-maker has faced amid the rise of mobile devices such as smartphones and tablets. Alcoa, strained by mistimed acquisitions, heavy debts and macroeconomic headwinds, will also be leaving the Dow after an over 50-year time as a bellwether for the index. Alcoa is usually the first Dow component to report its quarterly earnings.

-- Written by Antoine Gara in New York

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
SYM TRADE IT LAST %CHG
AA $9.41 0.00%
BAC $16.36 0.00%
GS $187.75 0.00%
HPQ $28.03 0.00%
NKE $112.50 0.00%

Markets

Chart of I:DJI
DOW 16,643.01 -11.76 -0.07%
S&P 500 1,988.87 +1.21 0.06%
NASDAQ 4,828.3250 +15.6170 0.32%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs