: S&P 500 bets on Penn National Gaming and Caesar’s in index reshuffle

United States

The S&P 500 is betting on Penn National Gaming Inc. and Caesar’s Entertainment Inc. amid increasing legalization of sports betting in the U.S.

Penn PENN, -0.38% and Caesar’s CZR, -0.13% were announced as incoming members of the S&P 500 index SPX, +0.10% Friday afternoon, along with semiconductor manufacturer NXP Semiconductors NV NXPI and Generac Holdings Inc. GNRC, which sells equipment used to generate power. Flowserve Corp. FLS, SL Green Realty Corp. SLG, Xerox Holdings Corp. XRX and Vontier Corp VNT will drop down to the S&P MidCap 400 to make room. The changes are scheduled to take place before the start of trading on March 22.

Penn has seen its stock rise nearly 750% in the past year amid further legalization of sports betting and its investment in popular sports website Barstool. Penn is using Barstool’s branding on its sports-gambling platform, which competes with Flutter Entertainment PLC FLTR, +0.11%, DraftKings DKNG, +0.20%,  William Hill WMH, ,  Caesar’s and others as U.S. states legalize sports gambling. Michigan became the 15th state to allow online sports gambling earlier this year.

Barstool founder Dave Portnoy has talked about the stock often while taking up investing publicly during the COVID-19 pandemic. Penn stock closed at a record high of $ 130.47 Friday, then gained about 7% in after-hours trading following the announcement.

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Caesar’s is in the process of combining with William Hill to create a larger rival for online sports betting in the U.S., and the stock has enjoyed strong gains in the past year, after falling in late February and early March of last year as fears of the impending pandemic grew. Caesar’s shares have gained 550% in the past 12 months, and prices rose more than 5% in after-hours trading.

NXP stock has roughly doubled in the past year, amid shortages of semiconductors that have acutely hit automotive manufacturers, a key segment for NXP, and shares rose more than 5% in the extended session. Generac has increased nearly 250% in the past 12 months, and gained about 4% in late trading.

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Xerox stock has struggled despite investor Carl Icahn agitating for change at the printing giant while owning more than 15% of the shares. The stock plunged after an attempted hostile takeover of HP Inc. HPQ, -0.20% failed early last year, and has gained 12.6% in the past 12 months as the S&P 500 added 58.8%. Xerox shares declined less than 2% in after-hours action Friday. SL Green and Vontier shares also declined less than 2% in after-hours trading Friday, while Flowserve was steady.