A satellite model is placed on EchoStar Satellite Services logo in this picture illustration taken April 4, 2022. REUTERS
March 6 (Reuters) – S&P Dow Jones Indices said on Friday that data center equipment maker Vertiv photonics product makers Lumentum and Coherent, and telecom company EchoStar will join its flagship S&P 500 index.
The S&P 500, widely regarded as the benchmark for U.S. large-cap stocks, is tracked by trillions of dollars in index and exchange-traded funds, making changes to its membership closely watched by investors.
Here is an overview of the change to the index and stock reaction:
- Vertiv shares jumped nearly 6% in extended trading on the news, while EchoStar rose about 4%
- Companies added to the S&P 500 often see their shares rise as index-tracking funds buy the stock to replicate the benchmark, boosting demand and liquidity.
- Lumentum and Coherent were also last up 1.7% and 0.4%, respectively, after the bell
- The new entrants will replace dating platform Match Group managed care company Molina Healthcare food processor Lamb Weston and payroll software maker Paycom.
- Companies removed from the index can come under selling pressure as those same funds sell the shares to rebalance their portfolios.
- Paycom was last down 3% after the bell, while Match Group declined 0.7% and Molina slipped marginally.
- S&P Dow Jones Indices said the changes will take effect before the market opens on March 23 as part of the quarterly rebalance.
Reporting by Manya Saini in Bengaluru; Editing by Tasim Zahid
