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David Blitzer, S&P chairman of the Index Committee, on the decision to replace Kraft Foods with UnitedHealth Group on the Dow.
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On Friday a week from today dining out is David Blitzer chairman of the S&P Dow Jones indices committee which is the group.
That made the change sir welcome -- wonderful happy this afternoon.
Good afternoon a pleasure to be here so why did you opt to Baghdad -- united health care to the Dow index.
It's really two step decision the first was to look at Kraft which will split itself -- -- two businesses act after the market closes on October 1.
The larger one to be called -- delay.
-- -- have that 20% of its revenue -- the US the other 80% is expected to come out of Europe and some of someone and Asia.
And looking at that William the fact that the size -- -- stock would be small in the craft today that price would be falling crap today.
We really felt it was not the best best not to stay in -- -- to their -- joined the Dow Jones Industrial Average.
Yet when I -- -- there are so many companies with a larger market captain UnitedHealth as I'm sure you are well aware seventeen I believe the head of it.
And this isn't about that because a lot of folks Barron's Magazine for one.
Had called for modernization of the Dow index to be able to include some of the big price your -- an influential names like apple and Google in the text -- so.
Why did you easier when I'm on UnitedHealth.
-- presently.
Is companies that are important to the US economy to the US markets companies that might add some representation that wasn't in the Dow up until now.
One area that's clearly -- important -- Brian important as health care and health insurance and while there are some big health care companies in the Dow currently.
There are pharmaceutical companies right fighting -- child and John as a whole another physician a whole other area.
An area that we see is increasingly important to the American people and one that should be represented in the most watched index around.
Is -- political side of this because the anticipation with health care affordable care -- And all the increased the expectations for higher health care spending that I think -- kind of goes along with your point that.
This could be more influential company the health care company then it has been.
But it did the -- political related to legislation.
Health care.
It will be important spending on health care is likely to continue to rise.
Regardless of who gets elected this coming November or November 4 years later are probably 44 years later for that matter.
But health care is important it will continue to be more important it's -- rising PC -- -- GDP.
Not to have the way a lot of people pay for health -- represented in an index like the Dow Jones industrials it make any sense to us so we I felt.
This was the place the time.
To represent health care in -- is very widely watched gauge of all the way the financial markets move.
Well we sure appreciate you sharing what goes into this decision he -- -- is is really fascinating David Blitzer thanks so much.
Thank you have a good -- --
