S&P 500 to drop CIT Group, add Red Hat

NEW YORK, July 20 (Reuters) - Standard & Poor's said on Monday it will remove CIT Group Inc CIT.N from its flagship S&P 500 stock index .SPX and replace it with software company Red Hat Inc RHT.N after the close of trading on July 24.

CIT, the struggling New York-based lender to small- and mid-sized businesses, is being removed after its market value fell below $275 million, ranking 500th in the index.

Red Hat is the world’s largest provider of Linux software, and is based in Raleigh, North Carolina.

Shares of companies joining the S&P 500 often rise because many portfolio managers try to track the index, and must buy shares of companies that enter it.

Red Hat shares closed Monday up $1.72 at $22.32 ahead of the announcement. CIT shares closed up 55 cents at $1.25. (Reporting by Jonathan Stempel)