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Dow Watch: Replacing General Motors

If GM does indeed file for bankruptcy and shareholders are wiped out, the Dow will need to find a replacement. Who should it be?

(At 1:09 p.m. EDT)

I'm a bit perplexed by trading in shares of

General Motors

(GM) - Get General Motors Company Report

today. It appears all but certain that the automaker will file for bankruptcy protection in the coming days, now that a small group of

GM bondholders has accepted an amended agreement

that will make the bankruptcy process go smoother.

Equity holders will likely be completely wiped out if GM does indeed file on or before Monday. So why, then, are GM shares up 3.5% right now at $1.19? In fact, I can't figure out why the stock isn't trading closer to zero, given that the relative certainty of a bankruptcy filing should be priced in now.

Perhaps traders are trying to use volatility in the stock to make a quick profit. Earlier, shares jumped 23% to $1.42, but they've also fallen by as much as 7%. What am I missing? Why is this not a penny stock right now if bankruptcy is a foregone conclusion?

Despite the gain in GM, which is essentially the most watched component on the

Dow Jones Industrial Average

Thursday, the index was only rising 15 points to 8315. It has also been all over the map, falling as low as 8246 and rising as high as 8388.

Procter & Gamble

(PG) - Get Procter & Gamble Company Report

shares traded a bit higher even though the company said it expects 2010 earnings below Wall Street's expectations.

P&G said earnings for that year

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should fall in the range of $3.65 to $3.80 a share, well below analysts' expectation of $3.91. Shares were up 13 cents at $51.91.

Other consumer-related stocks were getting hit hard Thursday, with

Home Depot

(HD) - Get Home Depot, Inc. Report

shares leading the decline. The home improvement retailer held its annual shareholder meeting earlier Thursday in Atlanta.

Turning back to GM, I was reminded of

a piece I wrote in February

that examined which components should be tossed from the Dow and which companies deserved to be added.

If the automaker does indeed file for bankruptcy and shareholders are wiped out, the Dow will need to find a replacement. Some market analysts I spoke to suggested a handful of very worthy names, all of which I think would be a great addition to the Dow.

Among the recommendations are


(AAPL) - Get Apple Inc. Report



(GOOG) - Get Alphabet Inc. Class C Report



(V) - Get Visa Inc. Class A Report



(CSCO) - Get Cisco Systems, Inc. Report





Emerson Electric

(EMR) - Get Emerson Electric Co. Report



(HON) - Get Honeywell International Inc. Report


Not that my opinion really matters to the Dow editors, but I'd give my endorsement to either Apple, which acts as a solid technology and consumer play, or Honeywell, as I never really understood why it was yanked from the industrial average in the first place.