S&P Dow Jones Indices announced late Wednesday that S&P index changes coming Monday would include U.S. natural gas producer Chesapeake Energy (CHK) and defense contractor Mercury Systems (MRCY). CHK jumped on the news while MRCY also edged up Thursday.
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The ratings agency announced that Chesapeake will join the S&P MidCap 400, replacing. Mercury Systems will move from the midcap index to the S&P SmallCap 600. Both changes are effective at the start of trade Monday.
Arconic (ARNC), a metals processing and fabrication operation, is exiting the S&P SmallCap 600 index. Fund manager Apollo Global Management (APO) is expected to close its $5.2 billion acquisition for ARNC soon.
The S&P index changes follows Chesapeake Energy announcing Monday it would sell its remaining assets in the energy rich Eagle Ford shale region to SilverBow Resources (SBOW) for $700 million.
CHK has divested $3.5 billion in Eagle Ford assets, as it moves away from oil production to focus primarily on natural gas. In January it sold portions to WildFire Energy for $1.43 billion. In February, the Oklahoma City-based energy producer also unloaded assets to INEOS for $1.4 billion.
S&P Index Adjustment
CHK stock surged 4.4% to 86.24 Thursday during market trade, reversing a four-day decline and moving above its 200-day moving average.
Meanwhile, MRCY edged up around 2.5%. Mercury Systems stock gained 6.9% to 36.17 on Wednesday, coming back up to its 50-day line. APO and ARNC edged down and up, respectively.
The IBD-tracked Oil & Gas-U.S. Exploration & Production group has advanced around 4.7% in 2023, underperforming compared to the S&P 500’s 15% gain. The group jumped more than 8% in June, as oil prices recovered, outpacing both the S&P 500 and the Nasdaq.
U.S. natural gas futures hovered around $2.60 per million British thermal units early Thursday, down around 60% from the same time last year when futures spiked to 14-year highs as Russia’s invasion of Ukraine sparked fears of an energy crisis in Europe.
CHK has a 50 Composite Rating out of 99. Chesapeake Energy stock has a 38 Relative Strength Rating and its EPS Rating is 10 out of 99.
Please follow Kit Norton on Twitter @KitNorton for more coverage.
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Source: https://www.investors.com/news/sp-index-shuffle-boosts-these-small-cap-midcap-names/?src=A00220&yptr=yahoo