Google, Cisco May Be Dow Candidates

Speculation over new candidates to join the Dow Jones industrial average is always a bit of a horse race since adding or removing companies in the index is a relatively arbitrary choice (Dow stocks are chosen by the The Wall Street Journal, which is published by Dow Jones). Deciding who to cut from the list gets get easier when shares of Dow components like Citigroup and General Motors trade below $2 a share, but possible adds include a wide range of possibilities. Reuters surveys possible replacements:

• Google
• Cisco
• U.S. Steel
• Goldman Sachs
• Visa
• Apple
• Aflac
• Northern Trust

Also, over at the Reuters Global Investing blog, Arzu Cevik, director at Thomson Reuters Strategic Research, mentions Apple and Google, plus a few other biotech and tech names:

• Abbot Labs
• Amgen Bristol
• Genentech
• Gilead Sciences
• Monsanto
• Amazon

The last change to the Dow came in September, when AIG was replaced by Kraft Foods.

There's no real reason for inclusion in the Dow to boost a company's share price, but as Cevik points out it's really about prestige, which can (and often does) boost volume and share prices.