The S&P Dow Jones, the major American equity indices provider, has announced its plans to make several changes to its indices. The changes will come in the form of new additions, the moving of companies between stock market indices, and alterations of the status of existing companies.
IHS Markit Ltd. (NASD:INFO) will be replacing TEGNA INC. (NYSE: TGNA) in the S&P 500, while TEGNA and Cars.com (NYSE: CARS) is going to take the place of J.C. Penney Company Inc. (NYSE: JCP) and Time Inc. (NYSE: TIME) in the S&P MidCap 400. The latter will replace Tuesday Morning Corp. (NASD:TUES) and Hornbeck Offshore Services Inc. (NYSE: HOS) in the S&P SmallCap 600. The changes will come into effect on Friday June 2, before the open.
IHS Markit is a firm that provides critical information, analytics, and solutions for economy-driving industries and markets. The company is headquartered in London and has branches around the world. IHS Markit will now join the S&P 500 GICS (Global Industry Classification Standard) Research & Consulting Services Sub-Industry index.
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TEGNA is in the midst of a spin-off of Cars.com, a transaction that will be completed before the open on Thursday June 1, final conditions pending. After the completion of the spin-off, TEGNA’s market capitalization will be more representative of the mid-cap market space. Time and J.C. Penney, on the other hand, are ranked close to the bottom of the S&P MidCap 400, and are not representatives of the mid-cap at this point. Tuesday Morning and Hornbeck Offshore Services are in a similar situation, as they are ranked near the bottom of the S&P 600, and are not representing the small-cap market space.
Independence Reality Trust Inc. (NYSE MKT: IRT) will be replacing Ultratech Inc. (NASD: UTEK) in the S&P 600 effective on Tuesday May 30. Veeco Instruments Inc. (NASD: VECO) is currently in the process of acquiring Ultratech, which is expected to be completed on or around Tuesday, depending on the final conditions.
Yahoo! Inc. (NASD: YHOO) is expected to be converted to a non-diversified, publicly traded, and close-end management investment firm under the Investment Company Act of 1940, following the acquiring of its operational business to S&P 100 & 500’s Verizon Communications Inc. (NYSE: VZ) mid-June. This means Yahoo! will not be eligible to continued inclusion in the S&P 500, and S&P Dow Jones Indices will remove the company from the list on Monday June 19.
This step will be taken so that traders can take advantage of the expected increased liquidity that is to surround the quarterly rebalance. A candidate to replace Yahoo! will be announced later with notice given to the clients.