Palantir Technologies Inc., Dell Technologies Inc. and Erie Indemnity Co. are set to join the S&P 500 as part of its latest quarterly weighting change.
Palantir shares gained 8.8% in premarket trading. Dell stock gained 6.5%.
The companies will replace American Airlines Group Inc., Etsy Inc. and Bio-Rad Laboratories Inc., according to a press release from S&P Dow Jones Indices Friday. The changes are set to go into effect prior to the open of trading on Sept. 23.
Companies must have a market capitalization of at least $18 billion and meet profitability, liquidity and share-float standards to qualify for the S&P 500, per August’s methodology.
Meanwhile, the removal of American Airlines from the US equity benchmark underscores the challenges the industry has faced of late, including delayed deliveries of planes and rising labor costs. The air carrier slashed its profit outlook in July after expectations for domestic demand proved too rosy. Its shares dropped 0.8% Friday post-market, adding to a 21% year-to-date decline.
Inclusion in the US equity benchmark can elevate a company’s profile and is becoming more important as passive investment funds grow. Expulsion from the benchmark can weigh on stock prices, as index funds sell shares to realign with the S&P 500’s new composition.
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