What happened
Glatfelter(NYSE: GLT), an "engineered materials" specialist, wasn't exactly special for investors on Tuesday. The company's stock suffered from its ejection from a high-profile index, with the share price taking a nearly 12% tumble on the day as a result.
So what
That index is the S&P SmallCap 600, which like its big brother, the S&P 500 index, tracks stocks grouped in that asset class. On Tuesday, S&P Dow Jones Indices -- the company that manages the indexes -- announced one of its periodic adjustments of component stocks. Unfortunately for Glatfelter, it was one of the titles getting the boot from the S&P SmallCap 600.
Using its typical boilerplate language for situations like this, S&P Dow Jones Indices said in its announcement that the two departures from the index are due to them being "no longer representative of the small-cap market space." Along with Glatfelter, CalAmp(NASDAQ: CAMP) is also being shown the door.
All of S&P Dow Jones Indices' Tuesday changes will take effect prior to market open on Monday, Sept. 19. The other entities being affected are the S&P 500, S&P 100, and S&P MidCap 400 indexes.
Now what
Glatfelter, a specialty industrial company in a world more taken with less traditional businesses, hasn't yet commented publicly on its impending exit from the index. And it isn't likely to, as such departures are hardly worth bringing attention to for the affected company.
While index inclusions or exclusions make little operational difference for a stock, they do affect visibility and market sentiment. That's a key reason why investors traded out of Glatfelter on the news.
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Eric Volkman has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
