By Nathalie Tadena
Standard & Poor's said it will add discount chain Dollar
General Corp. (DG) to its S&P 500 index, replacing Cooper
Industries PLC (CBE), after Eaton Corp. (ETN) completes its
acquisition of the electrical products maker.
Shares of Dollar General, which is set to join the S&P 500
after the close of trading on Friday, jumped 3.4% to $51 after
hours. The shares of companies joining the S&P 500 often rise
because many portfolio managers try to track the index. To do that,
they must buy shares of the companies that become part of the
index.
Dollar General, a retailer of low-cost goods, has shown higher
profits in recent quarters due to new stores being opened and
better-known brands of merchandise being added to its shelves. The
company has also been trying out opening bigger stores and
refurbishing old ones.
In September, the company reported its fiscal second-quarter
earnings surged 47% as it recorded strong sales across all of its
segments, including a double-digit increase in consumables
sales.
Shares have climbed 20% so far this year, through the close.
-Write to Nathalie Tadena at nathalie.tadena@dowjones.com
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