Shares of People's United Financial Inc (PBCT.O), a savings and loan holding company, rose 9 percent Monday, after news that it will be added to the S&P 500 Index .SPX, replacing Unisys Corp (UIS.N).
Shares of companies joining the S&P 500 Index often rise because many portfolio managers who track the index, are required to buy the shares of companies that are added.
According to a statement from Standard and Poor's dated November 7, Unisys will be removed from the index after the close of trading on Monday, while People's United will be added to the index after the close of trading on Wednesday. Trading of Unisys Corp's shares, which have shed about 80 percent of their market value so far this year, was halted Monday morning on the New York Stock Exchange.
Market capitalization of Blue Bell, Pennsylvania-based Unisys, which provides computer hardware and services, was about $313 million on November 7 trading close, ranking it 500th in the index, Standard and Poor's said.
On September 25, Standard & Poor's lowered the minimum market values required for inclusion in S&P 500 to market values of $4 billion or more from its earlier requirement of a market value of at least $5 billion -- a move reflecting this year's declines in stock prices.
Based on the number of shares outstanding as of October 31 and the stock's closing price on Friday, People's United Financial has a market capitalization of about $5.8 billion.
Shares of People's United Financial were up $1.05 at $17.70 on in morning trade Nasdaq. They touched a high of $18.20 earlier in the session.
(Reporting by Amiteshwar Singh in Bangalore; Editing by Amitha Rajan)