Our Terms of Service and Privacy Policy have changed.

By continuing to use this site, you are agreeing to the new Privacy Policy and Terms of Service.

Buffett's Berkshire Hathaway joins S&P 500 Index

By Hibah Yousuf, staff reporter


NEW YORK (CNNMoney.com) -- Warren Buffett's legendary Berkshire Hathaway joined the S&P 500 index after markets closed Friday.

Class B (BRKB) shares of Berkshire Hathaway fell during the first half of Friday's session, tracking the broader market, but began to climb in the afternoon and spiked during the last hour of trading. It ended 1.25% higher on the day, at $77.65 per share on volume of 66.4 million shares, 91% higher than the average 5.5 million.

Friday afternoon's surge in the stock's price and trading volume was a result of S&P 500 index fund managers buying the stock before close, said Fred Dickson, chief market strategist at D.A. Davidson & Co.

Companies added to the S&P 500 usually experience a boost in stock price because money managers that run index funds tied to the benchmark need to own it.

Shareholders of Berkshire Hathaway approved a 50-for-1 split of Class B common stock last month, so the company could offer shares to investors in Burlington Northern Santa Fe (BNI, Fortune 500), which it agreed to buy in November for $34 billion. Berkshire completed its purchase of the railroad company Friday.

The split cut the price of Class B shares from more than $3,300 a pop, to a more affordable $66, and paved the way for Berkshire to finally join a major stock index.

Berkshire will officially begin trading on the S&P 500 Tuesday, since the market is closed Monday in observance of President's Day.

One criteria for joining the S&P 500 Index is that the stock must be widely available. The index is a common proxy for the U.S. stock market, and major index funds that track the blue chip index hold shares of its companies.

Berkshire's Class A (BRKA, Fortune 500) stock is much pricier -- closing above $115,000 a share Friday.  To top of page

Search for Jobs

Index Last Change % Change
Dow 18,246.48 103.03 0.57%
Nasdaq 5,283.82 14.67 0.28%
S&P 500 2,159.93 8.80 0.41%
Treasuries 1.56 0.01 0.39%
Data as of 9:53am ET
Company Price Change % Change
Chesapeake Energy Co... 6.05 -0.07 -1.08%
Bank of America Corp... 15.24 0.08 0.53%
Qualcomm Inc 69.94 2.49 3.69%
Cognizant Technology... 49.17 -5.83 -10.60%
Wells Fargo & Co 44.29 -0.08 -0.19%
Data as of 9:38am ET
Sponsors

Sections

Lawmakers grill Wells Fargo CEO John Stumpf about CNNMoney report on the bank retaliating against whistleblowers who flagged fake accounts. More

California workers who don't already have access to a retirement plan at work will soon be enrolled in a new state-run IRA savings plan. More