Dollar General gets a boost from S&P addition
NEW YORK (AP) — Dollar General shares rose before Tuesday's opening bell on news that will join the S&P 500.
The S&P Dow Jones Indices, which manages the iconic market index, said late Monday that Dollar General Corp. will replace Cooper Industries PLC, which is being acquired by Eaton Corp., after the close of trading on Friday.
Dollar General, based in Goodlettsville, Tenn., operates more than 10,000 discount stores in 40 states.
Stocks typically gain when they added to indices because mutual funds and other institutional investors automatically target a portion of their capital at indices like the S&P or Nasdaq.
Citi analyst Deborah Weinswig said she had expected Dollar General to be added to the index back in March, after it first became eligible. But Weinswig said the jump in share purchases stemming from the move should boost the stock's share price by about 6 percent and backed her "Buy" rating and $65 price target for the shares.
Dollar General shares rose $1.68, or 3 percent, to $50.99 in premarket trading.