The Dow Jones Industrial Average (DJIA) is perhaps the most well-known stock market barometer in the world. It was launched on May 26, 1896. Since its inception, the index has changed its components 51 times. The first change occurred a mere three months after the index started, and the most recent change took place on March 19, 2015, when Apple replaced AT&T.
The components of the Dow are meant to represent the U.S. economy as a whole, and the DJIA generally consists of some of the biggest and most influential companies in the country. The Dow makes changes when a company begins to experience financial distress and becomes less prominent in the overall economy (such as when AIG was replaced in 2008) or when a broader economic shift occurs and needs to be better represented (for example, in 1997 when four of the 30 Dow components were changed). When there are changes to the composition of the index, some big names end up getting booted.
Bethlehem Steel is a great example of how the economy has changed over the last several decades. Founded in 1857, Bethlehem Steel was at one time the second-largest American producer of steel. By the 1970s, cheaper imported foreign steel was beginning to take its toll on Bethlehem's top-line revenue. By the 1980s, the company began shutting down some of its operations to cut costs and remain profitable.
Due to its declining business, Bethlehem Steel was removed from the Dow in 1997 following 68 years as part of the index. The company declared bankruptcy in 2001, and its remaining assets were sold off in 2003. Those assets exist today as part of ArcelorMittal.
General Electric is one of the original Dow stocks from when the index was created in 1896. However, GE hasn't always been a part of the DJIA. It was removed from the Dow twice in the index's early days.
GE got dropped from the index in 1898, before it rejoined the Dow in 1899. After getting dropped again in 1901, it returned to the Dow in 1907, where it has been a mainstay ever since.
GE isn't the only current Dow stock that's been dropped only to return later. IBM joined the DJIA in 1932, but it was absent from 1939 to 1979 before returning for good. Coca-Cola also joined the DJIA in 1932, but it was not part of the index from 1935 to 1987. AT&T was removed from the Dow in 1928, 2004 and 2015.
The Travelers Companies joined the DJIA in 1997 as part of the biggest single update to the index, when four of the 30 components were changed. In 1998, Travelers merged with Citicorp, and the new combined entity named Citigroup, Inc. inherited Travelers' spot in the DJIA.
Citigroup was removed from the Dow following the 2008 financial crisis, when the company's market cap shrank by over 90% and it teetered on the brink of bankruptcy. Travelers was spun off from Citigroup in 2002 and went on to replace Citigroup in the Dow in 2009.
Sears Holdings joined the Dow in 1924. During the 1980s, Sears was the largest retailer in the country, until Wal-Mart took the top spot by the end of the decade. Wal-Mart went on to join the Dow in 1997, and Sears was removed following a 75-year run in the index in 1999.