Palantir, Dell Stocks Jump on S&P 500 Addition -- Barrons.com

Dow Jones2024-09-06

By Ben Levisohn

Investors love it when a stock gets added to the S&P 500 -- and they're showing that love for Palantir Technologies, Dell Technologies, and Erie Indemnity after the three stocks were added to the index following Friday's market close.

S&P Dow Jones Indices announced Friday evening that Palantir would replace American Airlines, Dell would replace Etsy, and Erie would replace Bio-Rad Laboratories in the S&P 500 before the start of trading on Sept. 23. American and Bio-Rad would be added to the S&P MidCap 400, while Etsy would join the S&P SmallCap 600.

The stocks added to the S&P 500 are getting the kind of bounce you'd expect them to. Palantir has gained 7.8% in after-hours trading Friday, while Dell has risen 6.2%, and even stodgy Erie, an insurer based in -- you guessed it -- Erie, Penn., has advanced 3.1%. That's on the assumption that investors benchmarked to the S&P 500 will be forced to buy their shares as the stocks get added to the index.

Getting removed from the index, however, doesn't have an equal, but opposite, impact. American Airlines is down just 0.7% in after-hours trading Friday, while Etsy has fallen 0.9%, and Bio-Rad has dropped 1.1%.

In June, B arron's Andrew Bary predicted that Dell and Palantir would be among the next stocks added to the S&P 500.

If you want to bet on companies that have been removed from indexes, there's even an exchange-traded fund for that. The Research Affiliates Deletions ETF, or NIXT, is set to begin trading on Sept. 10 and will include companies that get dropped from the large-cap indexes for five years.

But that sure doesn't beat the sugar rush of the pop when a stock gets added.

Write to Ben Levisohn at ben.levisohn@barrons.com

This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.

 

(END) Dow Jones Newswires

September 06, 2024 18:23 ET (22:23 GMT)

Copyright (c) 2024 Dow Jones & Company, Inc.

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