By Suzanne McGee and Tatiana Bautzer
(Reuters) – An error by S&P Dow Jones Indices might have contributed to volatility in shares of Morgan Stanley, Pfizer, PNC Monetary Providers Group and different shares in current days, merchants mentioned.
At problem was a listing of pending modifications to the Dow Jones U.S. Dividend 100 Index that S&P Dow Jones Indices launched late on March 1, naming 10 corporations slated for addition to the index and two for deletion. The modifications had been to take impact on March 18.
A complete of 23 shares had been affected by the modifications, in keeping with buying and selling desk notes obtained by Reuters.
A S&P spokeperson mentioned an unspecified error led to the mistaken names being offered to shoppers.
S&P Dow Jones issued a alternative professional forma record with a complete of 11 additions and three deletions after the market’s shut on Tuesday.
Morgan Stanley and PNC had been among the many corporations that had been to be added to the index on the unique record.
Their shares rose on Monday, however gave again these features on Wednesday. Against this, shares of Pfizer, which had been slated for deletion on the preliminary record, fell on Monday however rose on Wednesday when the revisions had been printed and it was clear that it will stay within the index.
Buying and selling volumes for all three corporations had been 50% to 80% larger than their 90-day averages this week.
Morgan Stanley and PNC declined to remark. Pfizer didn’t instantly reply to a request for remark.
“This isn’t that widespread an incidence,” mentioned Bryan Armour, an analyst at Morningstar who tracks exchange-traded funds.
The error triggered a scramble on buying and selling desks to assist their very own shoppers unwind trades made in anticipation of what proved to be incorrect upcoming modifications, merchants mentioned.
The Dow Jones U.S. Dividend 100 Index is designed to supply buyers a benchmark composed of shares in corporations with sturdy fundamentals and a file of paying excessive dividends constantly. It’s utilized by some index funds to construct portfolios.
Some merchants additionally search to purchase on bulletins of upcoming modifications earlier than they take impact and any asset administration corporations utilizing it as a benchmark should modify their very own portfolios.
(Reporting by Suzanne McGee; Enhancing by Ira Iosebashvili and Jamie Freed)
