Verizon Gets Booted From the Dow Jones Industrial Average. Is the Stock in Trouble?
The Dow Jones Industrial Average recently replaced Verizon with Alphabet.
Overview
When a stock gets removed from a major index, it can be a concerning sign for multiple reasons. One is that many funds may no longer have exposure to the stock, particularly if they tracked the index. This effectively forces them to sell, putting downward pressure on the stock. Another potential issue is that there may be fundamental reasons for the change that highlight a risk with the stock that investors may not have been previously aware of.
Verizon Communications (NYSE: VZ) is a stock that has, for the most part, done well this year. But recently, investors learned that it had been dropped from the Dow Jones Industrial Average, prior to the start of trading on June 29. What's behind the move, and is the stock destined to decline from here on out?
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Originally published at www.fool.com.