News of Conexant on S&P; 500 Jacks Up Share Price

Investors snapped up shares of Conexant Systems Inc. on Thursday morning in anticipation of the company’s move to the Standard & Poor’s 500 Index, pushing up the price of the Newport Beach computer chip maker’s shares by 18%.

Conexant’s stock gained $13.25 Thursday to close at $87.56 a share--a 52-week high.

S&P; said Wednesday, after the close of trading, that it had picked Conexant to replace Consolidated Natural Gas Co. in the index, effective after the close of business today. Consolidated is being acquired by a company already in the index.

The announcement created a rush in after-hours trading Wednesday and all day Thursday when 15.3 million shares traded hands--five times the average daily number traded over the past three months.

Being put on the S&P; 500 Index made Conexant stock an even hotter commodity than it already has been. Portfolio managers of certain funds that try to match the performance of the S&P; 500 must add the company to their holdings.

Conexant’s stock, which was trading at $9 a share last February, has doubled in value since the end of October.

The price has shot up along with the general run-up in the value of technology companies, especially those involved in communications products.

Conexant, spun off from Rockwell International Corp. in December 1998, produces semiconductor chips for cellular telephones, Internet-access gear and satellite-television set-top boxes. It earned $12.9 million on revenue of $1.4 billion last year.

Consolidated, a utility, is being acquired by Dominion Resources Inc., owner of Virginia’s largest electric utility. That transaction is expected to close today.