Google Added to S&P 500 Index
The high-flying shares of search engine Google are flying even higher Friday following news of its addition to the highly regarded Standard & Poor's 500 stock index. Google is set to replace Burlington Resources, an oil and gas company, at the close of business March 31.
In late morning trading, shares were up $26.11 to $368.00, a 7.64 percent increase. This follows a nine percent rise late Thursday after the news was first announced. The move is sure to also spark a flurry of stock buys in the company, say analysts.
This is due to many mutual and index funds basing their stock purchases on what is included in the S&P 500. This helps a fund better track the performance of the stock market. With the move, some financial analysts say as many as 20 to 30 million shares of the company would be purchased in the next few weeks.
"It's a sign that this is a company that represents the economy, represents the stock market and should be a member of the S&P 500," S&P 500 Index committee chairman David Blitzer said on financial cable channel CNBC Thursday.
The move is sure to push Google's shares higher again over the next few days and weeks, and the stock could again flirt with $400 very soon. Its market value will place it as the 19th largest member of the 500-stock index.
Other technology stocks also call the index home, including competitor Yahoo and online auction site eBay.