DoorDash, Williams-Sonoma And TKO To Join The S&P 500 Index

The S&P 500 is adding the stocks of DoorDash (DASH), World Wrestling Entertainment owner TKO Group (TKO), home goods retailer Williams-Sonoma (WSM), and natural-gas producer Expand Energy (EXE) to its benchmark index.

The additions are part of a reshuffling of the index that occurs each quarter. Stocks being removed from the S&P 500 in the latest shakeup include BorgWarner (BWA), Teleflex (TFX), Celanese (CE), and FMC (FMC).

The stocks of the companies being added to the S&P 500 each rose sharply on the news of their inclusion in the index, with shares of ride-hailing and delivery company DoorDash up 7%.

Being added to the S&P 500 means that exchange-traded funds (ETFs) and mutual funds that track the index’s performance must buy shares of the companies, giving them a boost.

S&P Dow Jones Indices makes additions and deletions to its flagship index, which tracks the 500 largest publicly traded companies by market capitalization in the U.S., each quarter.

The latest changes to the index go into effect on March 24 of this year.

Other changes announced include that Palantir Technologies (PLTR), Intuitive Surgical (ISRG), and ServiceNow (NOW) will replace Dow (DOW), Kraft Heinz (KHC), and Ford Motor Co. (F) in the S&P 100 subindex.

A company must meet a list of criteria to be considered for S&P 500 inclusion. This includes being profitable, domiciled in America, and have a market capitalization above $14.5 billion U.S.

Barclays (BCS) bank notes that stocks selected for inclusion in the S&P 500 typically see gains of 7% or more in the period ahead of their first day of trading within the index.

The S&P 500 index is down 2% on the year amid an ongoing selloff in U.S. equities.