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Kraft to Replace A.I.G. in Dow Average

Dow Jones & Company said Thursday that Kraft Foods would replace the American International Group in the Dow Jones Industrial Average when trading begins Monday.

In a statement, Robert Thomson, managing editor of The Wall Street Journal, said A.I.G. would not be replaced in the 30-stock index by another financial company because of “extremely unsettled conditions.” Kraft was chosen because there is no food maker in the industrial average, said Mr. Thomson, who oversees the makeup of the index.

A.I.G., the struggling insurer, is being removed as the company’s poor health has prompted the Federal Reserve to provide an $85 billion emergency bailout loan. Shares of the company have fallen 83 percent over the last three sessions as A.I.G. faces a liquidity crunch amid the continued downturn in the credit markets. Its free-fall has dragged the industrial average down sharply.

There are no set criteria for stocks added to the Dow average, but they must be established United States companies that are considered leaders in their industries.

The 112-year-old index was last changed in February, when Bank of America and Chevron replaced the Altria Group and Honeywell International.

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