S&P Dow Jones Indices said on Friday that data center equipment maker Vertiv Holdings LLC, 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:
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.
The new entrants will replace dating platform Match, 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.
S&P Dow Jones Indices said the changes will take effect before the market opens on March 23 as part of the quarterly rebalance.
