StockFetcher Forums · General Discussion · S&P 500 index<< >>Post Follow-up
glgene
523 posts
msg #37489
Ignore glgene
8/16/2005 1:27:38 PM

About a week ago (or so), a new stock was added to the SP 500 index. Can
someone identify for me the name of that stock and what date it was
added to the SP 500? Thanks in advance.

GL Gene



glgene
523 posts
msg #37490
Ignore glgene
8/16/2005 2:15:36 PM

I think I found it. Added to the SP 500 on 8/12/05 was Murphy Oil (MUR). What I don't understand is the following:

.....Date.... Open.. High. Low.. Close.. Volume.. Adj Close*
15-Aug-05 55.85 56.01 55.45 55.80 1,526,200 55.80
12-Aug-05 56.40 56.40 55.46 55.88 18,226,800 55.88
12-Aug-05 $ 0.113 Cash Dividend
11-Aug-05 55.47 56.50 55.40 55.98 1,165,000 55.87

Trading volume went from 1.1 million shares on Aug. 11 to 18.2 million on Aug. 12 ... but the price barely budged. I don't get it. Why wouldn't the price have zoomed upward that day when institutional buyers had to buy to rebalance their portfolios to include MUR?

GL Gene



DasKapital
36 posts
msg #37500
Ignore DasKapital
8/17/2005 2:13:05 PM

Hey Gene,

I claim no expertise in these matters, so take the following comments accordingly:

Note that the public announcement of MUR’s move to the SP500 was made on August 4, and the stock did move up in the days following, no doubt due in part to speculation. However, there’s nothing to say that there wasn’t a “strong rumor” among insiders prior to August 4.

Remember also that MUR was the heaviest weighted constituent in the SP400 MidCap index (as of March 31,2005) prior to becoming a pimple on the rear-end of the SP500. (Yes, the energy sector is responsible for much of the YTD returns of both indices, but still represents less than 10% of the sector weighting in both, and MUR is a small fish in the SP500 energy sector).

So while SP500-benchmarked funds were buying a small piece of the float of a lightweight constituent, relatively speaking, the SP400-benchmarked funds were selling a heavyweight. Notice all that range-bound trading in MUR during June and July that could be interpreted (by paranoid conspiracy-theorists) as orderly distribution, as the shares were being shifted out of some funds and into others, if the intentions were , say, inadvertently leaked prior to August 4. Never underestimate or discount the amount of collusion among insiders.

DK



glgene
523 posts
msg #37501
Ignore glgene
8/17/2005 4:48:50 PM

Das,

Thanks for the fine message. I learned something valuable with your post.


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