S&P Dow Jones Indices announced late Wednesday that S&P index changes coming Monday would include U.S. natural gas producer Chesapeake Energy and defense contractor Mercury Systems. CHK jumped on the news while MRCY also edged up Thursday.
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, a metals processing and fabrication operation, is exiting the S&P SmallCap 600 index. Fund manager Apollo Global Management 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 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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