Facebook has a new friend: the S&P 500.
Standard & Poor’s announced Wednesday that the social networking giant will be added to the benchmark index after the market closes on December 20, and will also be added to the S&P 100. Facebook shares rose 4.3% on the news in after-hours trading Wednesday.
Facebook will replace Teradyne Inc. in the S&P 500 and The Williams Companies in the S&P 100.
For Facebook, the benefits of joining the S&P 500 club are clear: an expanded investor base and validation that the company is one of the most important in the country.
And for the average investor, the move will make it easier to own a small piece of Facebook. According to Morningstar, there are 1,300 mutual funds and 13 exchange-traded funds that use the S&P 500 as their primary benchmark. So they would all add Facebook shares to their holdings once it is included in the index.
