Investing

Major S&P Index Changes Impacting Shares (MPC, RSH, HHS, HTCH, MRO, AMCXV, BYD, SRT, CVC, HOC, FTO, ENTR, GM)

We have some major changes announced by S&P for its three key indexes.  Changes are in the S&P 500 Index, S&P Mid-Cap 400 Index, and in the S&P SMall Cap 600 Index.

Marathon Petroleum Corporation (NYSE: MPC) will replace RadioShack Corporation (NYSE: RSH) with only a $1.4 billion market cap in the S&P 500 index, RadioShack will replace Harte-Hanks Inc. (NYSE: HHS) in the S&P MidCap 400 index, and Harte-Hanks with a $530 million market capitalization will replace Hutchinson Technology Inc. (NASDAQ: HTCH) in the S&P SmallCap 600 index as it ranked as #600 by market cap in the index.

Marathon Oil Corp. (NYSE: MRO), a current S&P 500 constituent, is spinning off Marathon Petroleum to its shareholders after the market close on June 30; what’s left of Marathon Oil will remain in the S&P 500 index following the spin-off.   S&P SmallCap 600 index and is no longer representative of the small cap market space.

AMC Networks Inc. (NASDAQ: AMCXV) will replace Boyd Gaming Corporation (NYSE: BYD) in the S&P MidCap 400 index; Boyd Gaming will replace StarTek Inc. (NYSE: SRT) in the S&P SmallCap 600 index as StarTek has only a $62 million market cap.  Cablevision Systems Corp. (NYSE: CVC) is spinning off AMC Networks after the market close on June 30 and what remains of Cablevision Systems will remain in the S&P 500 index.

Holly Corp. (NYSE: HOC), a S&P SmallCap 600 constituent, will replace Frontier Oil Corp. (NYSE: FTO) in the S&P MidCap 400 index.  Entropic Communications Inc. (NASDAQ: ENTR) will replace Holly in the S&P SmallCap 600. Holly is acquiring Frontier Oil in a deal expected to be completed on or about June 30 and it will change its name to HollyFrontier Corporation after the merger.

These index changes matter, but the largest gains generally come from the new additions rather than when a company moves up or down in the indexes.  RadioShack is indicated down about 2% and under $13.00; and Entropic is indicated up 3% around $8.55 but no trades have been seen.

As far as the others mentioned in the move, they are ratcheted moves within the various indexes.  The surprise is a simple one by our take: No General Motors Corporation (NYSE: GM) yet in the S&P 500 despite a $45 billion market cap.

JON C. OGG

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