S&P; to Announce Index Changes Later in Day
Standard & Poor’s Corp. said Wednesday that it will announce changes in the composition of its stock indexes later in the day, to prevent the news from affecting a stock’s closing price.
S&P;, a unit of publisher McGraw-Hill Cos., will change its announcement time from 4:50 p.m. Eastern time to 5:15 p.m.--after the close of all trading on U.S. markets, including off-exchange trading.
“We don’t want our announcements to affect a stock’s official closing price for the day,” said David Blitzer, chairman of the S&P; index committee.
The change comes after America Online Inc. surged in after-hours trading following the Dec. 22 announcement that it will be added to the S&P; 500. AOL will be the first Internet company in the leading blue-chip index.
Stocks joining the S&P; 500 often climb, in part because mutual funds that seek to mimic the index must buy shares.
Some traders were able to buy AOL after hours Dec. 22 through off-exchange dealers and electronic networks, such as Reuters Group’s Instinet. The shares, at $122.88 at the close of New York Stock Exchange trading, later rose to $138.