Hewlett-Packard removed from index amid PC slump

Hewlett-Packard is being removed from the Dow Jones Industrial Average, a sign of waning confidence in the company’s turnaround efforts amid a historic slump in the PC industry.

The exit, announced as part of the biggest reshuffling of the index since Apr 2004, delivers another blow to chief executive Meg Whitman’s quest to revive growth at the storied PC maker.

HP’s shares have declined for three straight years as consumers abandon PCs for smartphones and tablets. Whitman last month scrapped her forecast for a return to revenue growth in 2014 as lacklustre demand for hardware and services, and aggressive price cuts amplify the impact of the downturn for computers.

The departure from the Dow reflects those challenges, according to Shannon Cross, an analyst at Cross Research.

“It’s certainly not something you want to happen on your watch. The Dow is more about symbolism and prestige than anything else,” Cross said.

At about $22, HP is the third lowest-priced stock in the Dow index.

Goldman Sachs Group, Visa, and Nike will be added to the Dow Jones index. Bank of America and Alcoa are being removed along with HP. Four technology companies will remain: Cisco Systems, Microsoft, Intel, and International Business Machines.

-Bloomberg