Photo: By daysofthundr46 on Flickr
NEW YORK (AP) — Struggling retail chain Sears Holdings is getting knocked off the Standard & Poor’s 500 index.The index includes 500 stocks with large market capitalizations that are considered to be widely held and is considered a benchmark of the U.S. stock market.
S&P said Wednesday that Sears’ public float has been well below the 50 per cent threshold for inclusion on the index for a long time and is no longer considered representative of the index. A float refers to shares that are public and available for investors to trade.
Sears, which sells through its namesake and Kmart stores, has embarked on an aggressive cost-cutting plan, reduced inventory, sold off some assets and spun off others to bolster its results as it faces falling sales and tough competition. It reported a loss in its most recent quarter as revenue fell 7 per cent.
The retailer will be replaced by LyondellBassell Industries NV on the exchange Tuesday. The Dutch company makes and sells chemicals and polymers, refines crude oil, produces gasoline blending components and develops and licenses technologies for producing polymers.
“The action is rules-based and solely a function of the public float of our shares, and not the valuation or performance of the company,” said Chris Brathwaite, in a statement emailed to The Associated Press. “We would also highlight that S&P recently boosted Sears Holdings’ credit ratings outlook to stable from negative, saying the company had improved its liquidity through our financial and operational discipline.”
Sears shares closed up $2.49, or 4.5 per cent, at $57.45.
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