Alcoa, H-P, Bank of America kicked off Dow

The economy is recovering !!!!!!!!!
Right !
Pay no attention to the man behind the curtain !
Can't wait for this years October suprise !!!

Alcoa and two other stalwarts of the Dow Jones industrial average are being replaced by newcomers. Alcoa, Bank of America, and Hewlett-Packard are being dropped from the index of America's 30 top companies and replaced by Goldman Sachs, Nike, and Visa.

The dropping of Alcoa and the other changes represent the biggest shakeup of the Dow in nearly a decade.


www.csmonitor.com...

reply to post by OLD HIPPY DUDE


In the UK our lack-lustre Chancellor Osborne is telling us that we are facing a recovery. Sure we are with contracts that employ people only as and if a company needs them, some firms paying no council tax and lots of the big guys not paying any company tax but employing people in this country to work for them and huge sales here. Add in very low wages and tax credits paid by the government to allow employers to pay their workers less - how can we move forward, only artificially on an ever dwindling tax revenue and massive debt.

The whole way the economy is being run these days shows that things are dire. If you ask anyone from the business world they are being bullish because of the perks the government may give them in the future. But the concensus of the people is actually No, it is not getting better and we are slowly going down the plug whilst the top dogs grab huge payoffs and go onto other grasses greener or have enough to comfortably retire for the next 100 years.

Sorry for soooo many edits.

And this has to do with the ecomomy how? The DoW is groups of stocks all within a certain price range that gives an idea as to the health of the stock market. If your stock goes to low or to high you are removed. They also remove and replace companies at times to make it more representive of the economy. They did the same thing in 2004 with 3 companies and replace single companies every couple of years. If your stock is to low you do not have enough influence on the DoW, if your stock is to high you have two much so your stock needs to be in a certain range. Although most companies added tend to be on the way up and companies removed on he way down.

reply to post by MrSpad
I could see this as a sign of the economy. Look what is being dropped and the replacements, they paint a little picture of the economy to me like this:

Technology and manufacturing (raw materials) are losing ground and people are spending a lot of their $ on Nike's so much so that they have been borrowing from Visa to get them.

This could be a sign that Visa is putting a stranglehold on the nation, they are certainly making a lot of money off of those who choose to use it. Bank of America has lost a lot of credibility and people just aren't willing to deal with them as much any more. I know I transferred all ties from them in business and personal accounts. This could be a sign that our manufacturing sector is really shutting down ALCOA is a huge supplier of Aluminum (3rd largest I've read somewhere). Investors are putting more faith in sporting goods than industrial goods. VISA makes a lot from credit card usage and also VISA backed check cards, which I always use as a proper debit card to avoid them making any excess off me.

My point is that we are going downhill if we think America can survive on shrinking manufacturing with a population base that values sports the way they do. In any case, people haven't reigned in their credit card usage and I see this as one more indicator of an economy that is "floating on credit". What happens when people aren't paying off their Visa's before the pair of Nike's wears out? Well, they may still have credit to get more... and Visa is one step closer to owning them.

evc1shop
reply to post by MrSpad

 

I could see this as a sign of the economy. Look what is being dropped and the replacements, they paint a little picture of the economy to me like this:

Technology and manufacturing (raw materials) are losing ground and people are spending a lot of their $ on Nike's so much so that they have been borrowing from Visa to get them.

This could be a sign that Visa is putting a stranglehold on the nation, they are certainly making a lot of money off of those who choose to use it. Bank of America has lost a lot of credibility and people just aren't willing to deal with them as much any more. I know I transferred all ties from them in business and personal accounts. This could be a sign that our manufacturing sector is really shutting down ALCOA is a huge supplier of Aluminum (3rd largest I've read somewhere). Investors are putting more faith in sporting goods than industrial goods. VISA makes a lot from credit card usage and also VISA backed check cards, which I always use as a proper debit card to avoid them making any excess off me.

My point is that we are going downhill if we think America can survive on shrinking manufacturing with a population base that values sports the way they do. In any case, people haven't reigned in their credit card usage and I see this as one more indicator of an economy that is "floating on credit". What happens when people aren't paying off their Visa's before the pair of Nike's wears out? Well, they may still have credit to get more... and Visa is one step closer to owning them.

Visa was moved up no because of its credit card buisness but, do to its massive global technology buisiness. Credit cards are just a small part of its buisiness.

reply to post by MrSpad
Thanks for pointing that out. Not being an economist or stock trading person, I do not know how much more Visa has over and above their Credit Card Services but I do think it peculiar that Technology (HP) and Industry (ALCOA) companies would become less significant than a sneaker (and whatever else they make) manufacturer. It just points out to me where the consumers put their money. That is what troubles me when I see a change like this.

reply to post by evc1shop


HP has gone up over 50% this year, and Alcoa is only down 7-8%, and Bank of America is down to $14.61 from $50 in 2007. None of them are doing badly, but they've underperformed when compared to the rest of the stock market.

When you look at closing Monday, just for the day, Goldman Sachs was up 3.5%, Visa was up 3.4% and Nike was up 2.2%. Now look at the other three. Alcoa was down 0.3%, HP was down 0.4% and Bank of America was up 0.9%.

It has nothing to do with technology going away, or these companies hurting badly, as it does with them just not being performers on the market like they once were.

reply to post by Zaphod58
OK. I thought it was tied into forecasting of who is going to be doing more in the future. Thanks.
I will watch this thread from the sidelines now that you and Spad have cleared that up for me.

evc1shop
reply to post by Zaphod58

 

OK. I thought it was tied into forecasting of who is going to be doing more in the future. Thanks.
I will watch this thread from the sidelines now that you and Spad have cleared that up for me.

Companies get deleted and sometimes added again, depending on their performance. For example Chevron was a member from 1930 to 1999 when it was dropped, then added again in 2008.

GE is the longest serving member, since 1907.