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Goldman Sachs kicks Bank of America off Dow Jones benchmark
by Robert St George on Sep 10, 2013 at 14:26
S&P Dow Jones Indices has announced that Bank of America has been demoted from the flagship Dow Jones Industrial Average index, to be replaced by Goldman Sachs.
The Dow Jones comprises 30 mega-cap US stocks and is commonly cited as an indicator of the wider market.
The index provider blamed Bank of America’s depressed share price for its defenestration; its stock trades hands for $14.48, whereas Goldman shares cost $159.41.
But from the lower base, Bank of America has enjoyed the better year. Its shares have appreciated by 65% over the past 12 months, while Goldman Sachs is up by 37%.
Net income at Bank of America also almost trebled in the second quarter compared with the first, to $4 billion. At Goldman Sachs, net earnings plunged by 15% to $1.9 billion for the same period.
In other changes to the Dow Jones Industrial Average, Visa and Nike have been added to the index, in the place of Hewlett-Packard and Alcoa.
This is the first time S&P Dow Jones Indices has replaced three constituents in one sweep since 2004.
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