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AOL shares click with S&P
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December 23, 1998: 11:22 a.m. ET
Stock soars as company joins S&P 500, Deutsche Bank ups price target
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NEW YORK (CNNfn) - Shares of Internet service provider America Online Inc. opened sharply higher Wednesday after Standard & Poor's said AOL will replace Venator Group Inc., formerly Woolworth, on the benchmark S&P 500.
The stock also was given a boost in early morning trading after Deutsche Bank raised AOL's price target from $121 to $165.
Shares of America Online (AOL) opened up 16-1/8 from Tuesday's close 122-7/8. But after reaching a high of 141, the stock retreated to 136-5/8, down 1-3/8 from its opening price of 139.
Commenting on the stock's intraday decline, ABN Amro analyst Scott Appleby said, "AOL is up 12 percent from yesterday's close, a bit too high a premium to pay for a stock joining the S&P 500. The stock just got a little ahead of itself."
As of the end of November, AOL was the 52nd-largest company on the New York Stock Exchange with a total market capitalization of $40.09 billion.
Joining the S&P 500, a key barometer of stock market activity and performance, generally indicates a high demand for a stock. An increase in a stock's price is normal after such an announcement, as mutual funds that mimic a benchmark must buy shares to reflect the performance of that index.
The addition of AOL to the S&P 500 may be an attempt to update the image of the venerable index by adding a red-hot Internet stock and giving it more of a technology slant.
Venator (Z), the parent company of Foot Locker, Champs and other retail stores, closed its chain of Woolworth five-and-dime stores and sold its landmark Woolworth building in New York City in July, saying it would focus on its footwear business.
Shares of Venator shed 1/2 to 6-5/16 in early morning trading. 
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America Online
Venator
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