Speculation of what stocks will be included in the reconstituted Russell 2,000 index prompted some shares to triple Wednesday, but the gains in ABR Information Services Inc., Chaparral Resources Inc. and Pitt-Des Moines Inc. shrunk or disappeared Thursday as investors realized they acted prematurely.
"There was a whole lot of lunacy related to the end of quarter and speculation about the re-balancing of the Russell 2,000 index," said Bill Meehan, senior market analyst with Cantor Fitzgerald.
The stock indexes maintained by Frank Russell Co.--the Russell 3,000, comprising the 3,000 largest U.S. stocks, and two subindexes, the Russell 1,000 of large companies and the Russell 2,000 list of small stocks--are reconstituted annually. The new lists will be available at Russell's Web site (http://www.russell.com) on July 8.
Index investors, who try to match the performance of a benchmark by buying its component stocks, need to reshuffle their holdings in line with the changes made by Frank Russell. Indexers often try to get a jump on the changes, which are made based on closing midyear prices.
Pitt-Des Moines, which was on the preliminary Russell 2,000 list released June 11, fell $28.88 to $33.63 Thursday. It gained $30 to $62.50 on Wednesday.
Chaparral Resources was not on the preliminary list, but gained $16.25 to $39.50 on Wednesday regardless. Chaparral fell $7.53 to $31.97 on Thursday.
ABR Information Services, also left off the preliminary list, rocketed $60.38 to $90.06 on speculation Wednesday--but Thursday it plunged $62.06 to $28.