March 24, 2006 7:45 AM PST

Google stock jumps on news of S&P listing

Google shares jumped 7.9 percent in morning trading Friday, following an announcement by Standard & Poor's that the search engine would be added to the S&P 500 Index.

Google, which has seen its stock more than double in the past year, will join the S&P Index on March 31, after the market's close. Investors are expected to cheer, given that index funds will be snapping up Google shares.

Bear Stearns analyst Robert Peck predicted that Google would rank within the top 30 companies in the index of blue-chip stocks. Joining the S&P 500 will lock up about 7 percent of Google's stock in index capital, "which we believe could effectively reduce the trading supply of the stock," Peck wrote in a research note Friday. "As supply decreases, the equilibrium price should increase."

Merrill Lynch analyst Lauren Fine said her firm was maintaining its "neutral" rating for Google. "We believe this news should give a nice boost to the stock, especially since its valuation is more attractive here," she wrote in a research note. "However, fundamentals pointing to tension between revenue growth and margins this year will likely keep the name trading in a range at least until the company reports its first quarter."

Shares of Google rose $26.99, or about 7.9 percent, to hit $368.88 in morning trading on the Nasdaq. The stock had traded down since reaching a record high of $471.63 in early January on the company's first earnings miss since going public in August 2004 and amid negative headlines about slowed growth going forward.

Google, which has outperformed the S&P in the past year, will replace Burlington Resources on the S&P 500.

CNET News.com's Elinor Mills contributed to this report.

See more CNET content tagged:
S&P, S&P 500, Robert Peck, Google Inc.

6 comments

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Google good for WallStreet, AnooX good for MainStreet
So Google insiders make another few 100 Million dollars and can now move from $20Mill mansions in Silicon Valley to $50Mill mansions.
They can upsize their private Jets, etc. Wooopydooo!
What good does that do for the public? For the 99.9% of the people who do not own Google shares, set aside did not buy the shares at 10 cents per share which is what the (wall street / silicon valley) insiders paid for it!
OTOH, 99.9% of people use search engine and a very large percentage have web sites that they would like to get properly listed under good search engines. For this 99.9% of the Public there is a better search engine that
does deliver real value to us, it is Anoox.

I can tell you why from my point of view as a small business owner this is so:
1- Anoox search results are better because they represent the Knowledge of the people via the ONLY Democratic process there is, that is 1 Vote per Person per Keyword. Details here:
<a class="jive-link-external" href="http://www.anoox.com/whyanooxsrbetter.jsp" target="_newWindow">http://www.anoox.com/whyanooxsrbetter.jsp</a>

2- Anoox Advertising rates are like 90% less than Google or Yahoo, because they de-emphasize the Price factor, you can read details of this here:
<a class="jive-link-external" href="http://www.anoox.com/how-ad-rates.jsp" target="_newWindow">http://www.anoox.com/how-ad-rates.jsp</a>

3- Anoox promises not to enter into any other business, which means I will not find them in competition to my small business, unlike Goo &#38; Yaooo which are in 100's of different businesses and entering more every day. Details here:
<a class="jive-link-external" href="http://www.anoox.com/in-search-engine-business-only.jsp" target="_newWindow">http://www.anoox.com/in-search-engine-business-only.jsp</a>

So if you are Google share holder by all means use Google, but if you are like me and 99% of other people who are not Google share holders (insiders), and just want the best value in search engine then use Anoox.
Posted by Cyrus_K (60 comments )
Reply Link Flag
Please stop
Nobody wants a useless search engine.
Posted by Charleston Charge (362 comments )
Link Flag
Very nice search engine Anoox is - Thank you
Thank you for informing us about this search engine Anoox.
At 1st I was sceptical about what you wrote but after spending a while on anoox web site and checking it out, I am blown away by the value that they provide us compared to Google &#38; Yahoo.
WOW!
I specially like the fact that I can buy Ads on anooX at so much lower prices than Google or Yahoo. Advertising on Google or Yahoo search engines was driving me out of business. I hated that bidding frenzy they create around keywords. Good for them, HORRIBLE
for us Advertisers.
Thank you gain.
I just wished I had found them sooner, would have saved so much on advertising :(
Well better late than never :)
Posted by caudio_roma (57 comments )
Link Flag
I like anoox but: Wallstreet rules MainStreet
I like Anoox alot. I think it is really the best search engine for the reasons that you have so well highlighted. Specially I like the fact that it's search results are democratically generated by majority vote of the people.
But, and this a BIG but: people are brain washed by the Big Media (WallSreet) Hype about Google &#38; Yahoo. So do you really think a search engine like anoox which is for the people and supposedly by the people has a chance in HELL against the Wallstreet/Media/Military axis of which Google &#38; Yahoo are 2 of the Key players!
I don't think so.
Just look at the last presidential election in US, Howard Dean backed by the People (via 1.5Mill donations of about $50 each) versus Bush &#38; Kerry backed by Wallstreet.
Need I say more!
So I say give it up on your promotion of anoox and accept the inevitable that Google &#38; Yahoo along with the rest of the Big US/UK Media machinery will own the "eye balls" of the planet.
Wall street rules Main street every time.
Face it.
Posted by free_people (66 comments )
Link Flag
Burlington Resources was bought out
by ConocoPhillips. That's why they won't be listed anymore. Google isn't "replacing" them, Google is taking the vacated slot.
Posted by (54 comments )
Reply Link Flag
Big Deal
This happens automatically when newly listed - all of a sudden tons of funds that mirror the S&#38;P suddenly start auto-buying Google since they are newly listed, hence the auto price jump!
Posted by jmanico (55 comments )
Reply Link Flag
 

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