S&P; 500 to Drop WorldCom, US Airways

Battered WorldCom Inc. suffered another blow late Monday when Standard & Poor’s said it is dropping the telecom giant from the blue-chip S&P; 500 index.

The news, reported after regular trading ended, sent the stock to a fresh 10-year low in after-hours trading, where it slid to $1.38. In regular Nasdaq trading the stock had slumped 14 cents to $1.44.

S&P; said it will delete WorldCom from the index at the close of trading today. S&P; said US Airways Group will be kicked out of the blue-chip index as well today. US Airways, which dropped 62 cents, or 17%, to $2.98 in regular New York Stock Exchange trading, fell to $2.85 after hours.

S&P; said it is deleting the stocks for “lack of representation,” a catch-all term for shares that S&P; believes no longer may accurately represent their industries.

On Friday, US Airways (ticker symbol: U) said it may seek bankruptcy protection. WorldCom (WCOM) has consistently denied it may file for bankruptcy, but the market has been treating the shares as if the firm’s financial failure is inevitable.

The stocks may face more selling today by institutional investors that seek to mimic the S&P; 500, and thus no longer will be compelled to hold the shares.

S&P; said it will replace WorldCom and US Airways in the index with Apollo Group (APOL) and BJ Services (BJS), respectively.

Apollo operates higher-education programs for working adults. Its units include the University of Phoenix.

BJ Services is an oilfield services company.

Apollo shares jumped $1.28 to $36.65 on Nasdaq in regular trading, then rose to $37.21 after hours. BJ rose 44 cents to $38.36 in regular NYSE trading, but wasn’t active after hours.