The Meaninglessness of the Stock Market Index in a Digital World
It’s not a good snapshot of the economy, which is incomprehensible anyway, and we now have far more information to understand the country’s companies.
by Alexis C. Madrigal
Jun 20, 2018
4 minutes
General Electric, which has been a component of the Dow Jones Industrial Average since Teddy Roosevelt was president in 1907, will be pulled out of the basket of 30 stocks next week. It’ll be replaced by ... Walgreens.
Why’d GE get bounced? It probably has something to do with the company’s fortunes. While it still generates a tremendous amount of revenue—$120 billion in 2017—its margins have fallen, and it swung into the red in each of the past two quarters. As a result, GE’s shares have fallen roughly 60 percent, from highs close to $32 per last year.
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