Time for the Dow to Ditch Ailing AIG

Index should replace enfeebled AIG or GM with Apple or Cisco
By Rob Quinn,  Newser Staff
Posted Sep 16, 2008 3:45 AM CDT
Pedestrians walk past AIG headquarters on Monday, Sept. 15, 2008 in New York.    (AP Photo/Jin Lee)
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(Newser) – The downsizing of American International Group should spur its ejection from the Dow Jones 30, Paul R. La Monica writes in CNNMoney. The company's inclusion in the index means its troubles will hurt the market even more than the tribulations of Lehman, Fannie and Freddie—its shedding of divisions will remove the rationale that got the insurance giant included in the first place, La Monica adds.

The Dow's editors don't tend to remove listings lightly—or singly—notes La Monica, but the deterioration in GM's business should make it another candidate for the boot. Wells Fargo, Apple, and Cisco Systems should be considered to replace AIG and GM, La Monica argues. Apple and Cisco represent an industry where the US "has continued to hold its own," he writes—and Wells Fargo is widely seen as one of the better-run banks.
(Read more American International Group stories.)