What is the story about?
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 thenews, while EchoStar rose about 4% * Companies added to the S&P 500 often see their shares riseas index-tracking funds buy the stock to replicate thebenchmark, 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 LambWeston and payroll software maker Paycom. * Companies removed from the index can come under sellingpressure as those same funds sell the shares to rebalance theirportfolios. * Paycom was last down 3% after the bell, while Match Groupdeclined 0.7% and Molina slipped marginally. * S&P Dow Jones Indices said the changes will take effectbefore the market opens on March 23 as part of the quarterlyrebalance.(Reporting by Manya
Saini in Bengaluru; Editing by Tasim Zahid)
