Sunday, March 26, 2006

Google enters the index / All eyes are on the Internet firm as it joins the S&P 500

Google enters the index / All eyes are on the Internet firm as it joins the S&P 500:
"Google shares jumped 7 percent Friday in response to an announcement late Thursday that the Internet company will be added to the Standard & Poor's 500 index, effective next Friday."
This "Index effect" has been well studied. Some argue it is liquidity, while others suggest it is an information story (more analysts, while others suggest it is merely supply and demand. (for a more complete review see Maxam's working paper.

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