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S&P 500 is a market capitalization weighted index of the top 500 US companies. (Note there are some exceptions and there are some non-US companies too). This index covers roughly 75% of US market.
As is evident from above short description of this index, it will change when following events occur
1. A company which is currently not part of this index grows big enough to qualify.
2. A company which is currently a part of this index looses value such that it no longer qualifies
3. A company, which is part of the index closes its business
4. A company, which is not part of the index is merged with another one and the two grow big enough to qualify
5. A company, which is part of the index is purchased by a non-US corportation and S&P500 committee decides not to keep this company in index (Chrysler is such an example).
Thanks.
Ranto
Yes -- they change regularly. Some companies are moved onto the list because they became large enough to move into the top 500. They may replace another company that falls off the list -- or may be put on because two companies on the list merged.
Other companies can be taken off the list if they go through an LBO and become a private company.
Dow Jones also reevaluates their list periodically.
Dr. Deth
I'm sure they do - The Dow Jones 40 Industrials has changed many times over the years - no idea what S&P criteria is for inclusion or how often they change - their website may have info
Ern
Yes. In fact, Tesoro Corporation is just added to the list and Maxim is taken out.
itsjunglepat
Yes, all indexes update on occassion
Feeling Mutual
Yes, quite often companies go out of business, and another company will take their place.
Sometimes a company will no longer meet the SP500 requirements, and will be replaced also.
Mr. Prefect
of course
nyse1182
as has been stated by other, yes. Standard & Poor's periodically reviews all of its indicies (S&P 500, S&P 100, etc.) for content make-up.
note to Dr. Deth: the dow jones industrial is comprise of 30 stocks, not 40....let's hope this is a typo on your part