What About Amazon? Dow Industrials Dumping GE for Walgreens Reflects Index’s Dilemma

A price-weighted methodology complicates the index’s adaptation to a 21st-century economy

The Dow Jones Industrial Average has ejected numerous blue-chip industrial companies over the past decade, including miner Alcoa Inc., Westinghouse Electric Corp. and this week General Electric Co., in an effort to adapt a 19th-century index to a 21st-century economy.

That path has become increasingly fraught, in part because of the limitations of how the index is constructed.

Critics...