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Tuesday, November 11, 2008
S&P 500 drops Unisys in favor of Conn. S&L

For those wondering what else could happen to Unisys Corp. this year: Standard & Poor’s Corp. dropped the stock from its widely watched S&P 500 index as of the close of trading yesterday.

The Blue Bell information technology company had been ranked last in terms of market capitalization among the 500 U.S. companies that make up the index.

The bear market for stocks has pulled down the value of just about every company this year. But Unisys’ shares have lost 87 percent as the computer company dealt with private-equity investors seeking a breakup, and a change in CEOs. Do I dare bring up its failed effort to put its red logo on a Center City office building?

As of Sept. 30, Unisys had 362.27 million shares of common stock outstanding. Using Monday’s closing price of 61 cents, the company had a market cap of $221 million.

In late September, Standard & Poor’s had lowered the minimum value to be included in the S&P 500 to $4 billion from $5 billion. That was a reflection of how big the pullback in stocks has been over the last year.

So out goes a tech stock and in comes a financial one. Unisys’ replacement in the S&P 500 is People’s United Financial Inc., a holding company for a savings-and-loan based in Connecticut. People’s United has a market cap of about $6.2 billion. S&P will add the financial stock after the close of trading tomorrow.

Unisys shares fell 33 percent yesterday, while People’s United shares closed at $17.70, up $1.05, or 6.3 percent.

The major reason for the movement is that managers of index funds that emulate the S&P 500 have to sell and buy shares of both companies to make sure their funds match the base index.

Quotable

Black Friday is going to be more like Grey November. I can’t recall such a dramatic shift for retailers in the last 20 years.

- Craig Rowley, national practice leader for retail at the Hay Group consulting firm, on retailers lowering already bleak forecasts for holiday shopping.

Posted by Mike Armstrong @ 2:30 AM  Permalink | File Under: Investing, Markets | Post a comment
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About Mike Armstrong
Mike Armstrong, a business editor and writer for nearly two decades, is the Inquirer's business columnist and PhillyInc blog editor.
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