Mackenzie Tatananni and Anita Hamilton

DoorDash, World Wrestling Entertainment owner TKO Group, home goods retailer Williams-Sonoma, and natural-gas producer Expand Energy will be added to the S&P 500, effective before the start of trading on March, as part of a quarterly reshuffling of the index.

BorgWarner, Teleflex, Celanese, and FMC will be removed.

DoorDash shares rose 7% in Friday after-hours trading to $190, while TKO stock was up 3% to $148, and Williams-Sonoma stock rose 2% to $192. Expand Energy stock edged up 1.5% to $98.

Among the companies that will be removed, shares of BorgWarner, which designs and manufactures automotive systems, rose 2% to $30 in Friday after-hours trading, while shares of medical-device maker Teleflex and chemical company Celanese were mostly flat.

S&P Dow Jones Indices makes additions and deletions to the index, which tracks the 500 largest publicly listed companies by market capitalization. The firm also announced other index changes effective March 24.

Alaska Air Group, specialty materials manufacturer ATI, Bath & Body Works, satellite company EchoStar, and clothing company VF will be added to the S&P MidCap 400.

Palantir Technologies, Intuitive Surgical, and ServiceNow will replace Dow, Kraft Heinz, and Ford Motor in the S&P 100, respectively.

A company must meet a list of criteria to be considered for S&P 500 inclusion. For starters, it must be U.S.-domiciled and listed an eligible U.S. exchange.

Moreover, its market cap must be greater than $14.5 billion, with the primary listing's float greater than 50% of the market cap. The company's sum of GAAP net income over the four most recent consecutive quarters must be positive, as well as the most recent quarter.

Barclays identified Interactive Brokers, Coinbase Global, Ares Management, Robinhood Markets, LPL Financial, Blue Owl Capital, and Tradeweb Markets as potential candidates for S&P 500 inclusion before the announcement.

Investors were also eyeing AppLovin as a possible contender. The mobile-technology company with a market cap of $88.3 billion was the largest of all candidates that met the S&P Dow Jones Indices criteria.

Barclays analysts led by Benjamin Budish noted that stocks selected for index inclusion typically see gains of 7% or more in the period ahead of their first day of trading in the index, "making Friday's event a potential catalyst for the stocks' activity."

However, the stocks sell off by an average of 1.3% in the first week following index inclusion, and are down around 1% in the following four weeks, the analysts wrote.

In addition, stocks selected for addition have sold off on average by 16 base points from the announcement to the close of the rebalance day, "and have also seen slightly negative returns in the first day and week following the rebalance," the analysts wrote.

Write to Mackenzie Tatananni at mackenzie.tatananni@barrons.com and Anita Hamilton at anita.hamilton@barrons.com

This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.

(END) Dow Jones Newswires

March 10, 2025 07:27 ET (11:27 GMT)

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