With the drop in stock prices there are a lot of companies that don’t belong in the S&P 500. As a matter of fact, there may not be enough large cap firms to keep the S&P 500 at a level where it contains 500 companies that really matter.
According to MarketWatch, companies such as E*Trade (ETFC) may get the boot soon. But the list of companies that should be taken off does not end with weak financials. The publishing company Meredith (MDP) is still on even though it has a market cap of just over $536 million. So is Office Depot (ODP), which is now a penny stock.
Looking at the list of S&P 500 stocks there are a large number that either have market caps below $1 billion or have stocks trading under $1.
The S&P 500 should probably be the S&P 199.
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