AIG Replaced By Kraft On Dow

Kraft Foods will replace American International Group in the Dow Jones Industrial Average on Monday, the publisher of the averages said today.

The change was prompted by the government decision to acquire 79.9 percent of AIG in return for a two-year, $85 billion loan.

The composition of the Dow industrials was last changed in February, when Bank of America and Chevron replaced former Kraft parent Altria Group and Honeywell International.

AIG has been in the industrial average since April 1, 2004.

John A. Prestbo, editor of Dow Jones Indexes, said the change was “forced by the effective nationalization of AIG and its very low stock price.”

Robert Thompson, managing editor of The Wall Street Journal, said, “We are refraining at this point from adding another stock in the financial industry because of the extremely unsettled conditions.

“We realize this decision leaves the Dow Jones Industrial Average underweighted in financials, and we will address this situation in due course," he said.

The Journal's top news editor oversees the makeup of "The Dow," which Charles H. Dow created as a 12-stock index in May 1896 and today is the best-known stock-market barometer in the world.