Thrift Up-and-Comers to the S&P 500

In our view, potential thrifts that may be added to the S&P 500 Index include New York Community and People’s United Financial. The primary factor driving the future potential changes to the S&P 500 Index is the merger and acquisition environment in the financial sector.

Pending deals in the financial sector include Banco Bilbao Vizcaya’s purchase of Compass Bancshares, which is expected to close in the beginning of September and the deal for SLM Corp which is forecast to be completed by the mid-October and is the subject of much press as it relates to pricing as well as closing.

The Standard and Poor’s does not necessarily replace a stock that has been dropped with a stock from the same sector. For example, Standard and Poor’s announced that Hudson City Bancorp would replace American Power Conversion which was acquired by Schneider Electric on February 6, 2007. Smith International (SII-$63.04) replace Golden West …