Dow Jones replaces 3 stocks in index

updated 4:51 p.m. ET April 1, 2004

NEW YORK - Three longtime components of the Dow Jones industrial average — AT&T Corp., International Paper and Eastman Kodak — will be removed from the index of the top 30 industrial stocks, Dow Jones & Co. announced Thursday.

They will be replaced by financial services company AIG Corp., Baby Bell Verizon Communications and pharmaceutical producer Pfizer Inc. The change will take place at the start of trading April 8.

“None of these changes was triggered by an event such as an imminent merger, which was the case in the past three instances of changes dating back to the early 1990s,” Paul E. Steiger, managing editor of The Wall Street Journal, said in a statement. “Rather, they recognize trends within the U.S. stock market, including the continued growth of the financial and health care sectors and the diminishing relative weight of basic materials stocks.”

The Journal’s top editors evaluate and select the components of the Dow.

Verizon joins another Baby Bell, SBC Communications, which was added to the index in 1999. It also replaces its former parent, AT&T, which had been a Dow component since 1939. International Paper had been included in the index since 1956, and Kodak since 1930.

Kodak, the struggling film and imaging company that has been one of the index’s worst-performing stocks, downplayed the change.

“Membership in any index has no bearing on our ability to manage the company for profitable growth,” spokesman Gerard Meuchner said.

AT&T and International Paper did not immediately return calls seeking comment.

The three stocks that were being dropped each fell in early trading, while prices rose for the companies that were being added.

The 30-stock index last changed on Nov. 1, 1999, when four stocks were replaced. At that time, two Nasdaq-traded stocks, Microsoft Corp. and Intel Corp., became the first Dow components not listed with the New York Stock Exchange.

The Dow Jones industrial average was created by Charles H. Dow as a 12-stock index in 1896 and has become the primary barometer of the U.S. stock markets.

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