Slumping US industrial giant General Electric will be removed from the prestigious Dow Jones stock index, S&P Dow Jones Indices have said. 

GE will be replaced on June 26 by pharmacy chain Walgreens Boots Alliance, which will contribute "more meaningfully" to the index, S&P Dow Jones said. 

GE was an original member of the Dow in 1896 and has been in the index continuously since 1907.

The move comes on the heels of a bruising two-year slump for the iconic US company, which has seen shares tumble nearly 60% over the last two years amid downturns in its power generation and oil services businesses.

S&P Dow Jones noted that the Dow index is weighted by stock price, which means that GE accounts for less than 1% of the overall benchmark.  

Walgreens Boots has a higher stock price and will have more influence on the index, which has 30 members. 

GE was started in the 19th century by Thomas Edison and has over time been an intermittent presence in a sprawling array of industries, including entertainment and finance.

The company has pared back some of these businesses in recent years, selling NBC Universal to Comcast and divesting most of its finance business. 

GE's best performing units of late have been health care and aviation.

The Dow's membership has evolved over time to add more technology companies, such as Apple and Intel and cutting many former giants such as Alcoa and International Paper.

Since the founding of the index, "the US economy has changed: consumer, finance, health care and technology companies are more prominent today and the relative importance of industrial companies is less," said David Blitzer, managing director and chairman of the index committee at S&P Dow Jones. 

"Walgreens is a national retail drug store chain offering prescription and non-prescription drugs, related health services and general goods," he added. 

"Today's change to the DJIA will make the index a better measure of the economy and the stock market."

Shares of GE fell 1.9% in after-hours trading to $12.71 last night on Wall Street, while Walgreens Boots jumped 2.6% to $66.30.