The Dow cuts the Cheese

[Lindsay LeCain]

Today, the Dow Jones Industrial Average (DJIA) made a significant change. Kraft Foods, part of the DJIA since September 2008, was released from the Average this morning and replaced with—UnitedHealth. A packaged foods company replaced by a healthcare system provider. According to National Public Radio (NPR), this move (in the larger scheme) means little for the market, but as an observer and consumer of media, I cannot help but see a larger implication.  

Only 48 times in the Dow’s 116 year history (the Average was founded by Charles Dow on May 26, 1896) has a company been removed from the index. The DJIA, designed to represent a snapshot of the US stock market, contains only 30 stocks. At a time when obesity rates are skyrocketing and healthcare costs the point of much contention, I can’t help but notice a significant paradigm shift. We are replacing individually wrapped cheese sticks with electronic health records. While many financial advisers and Wall Street big wigs will dispute this claim, I can’t help but wonder what the larger implications are for this swap out.

This marks one of the first financial stands we are making as a nation to supplant our investment portfolio by kicking Kraft to the curb and ushering in the personal health experts from UnitedHealth.