Google into the S&P 500

Google shares jumped today over 8% upon the news that the company's stock will be included in the Standard & Poors 500 Index.

Technologists, developers & students with little Wall Street backround might be inclined to snore such news off. However, stocks that get added to a major index tend to face inter-temporal supply / demand imbalances -- which is to say the stock price rises as portfolio & mutual fund managers buy it into their market-indexed portfolios.

Being added to a broad market index like the S&P 500 is an indication of agreement that the company represents the economy. It is a bit like being blooded for the Big Leagues.

While there are only a few days' trading volume of shares represented in the amount needed to satisfy quotas from indexed porfolios, there is a new symbolic factor which makes Google shares now more attractive to a broader spectrum of individual investors -- a growing segment of the market for many years. It would not be shocking to have Goolge shares beat their high from here within a few months.

[The author does not own Google stock.]