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

Frontline troops push for solar energy
The U.S. Marines are testing renewable energy technologies like solar to reduce costs and casualties associated with fossil fuels. Play
25 Best Places to find rich singles
Looking for Mr. or Ms. Moneybags? Hunt down the perfect mate in these wealthy cities, which are brimming with unattached professionals. More
Fun festivals: Twins to mustard to pirates!
You'll see double in Twinsburg, Ohio, and Ketchup lovers should beware in Middleton, WI. Here's some of the best and strangest town festivals. Play

Search for Jobs

Index Last Change % Change
Dow 18,247.49 114.79 0.63%
Nasdaq 4,993.46 29.93 0.60%
S&P 500 2,112.21 7.71 0.37%
Treasuries 2.06 0.06 2.95%
Data as of 2:11pm ET
Company Price Change % Change
Bank of America Corp... 15.97 0.16 1.02%
Apple Inc 128.88 0.42 0.33%
Chesapeake Energy Co... 16.30 -0.38 -2.28%
General Electric Co 26.00 0.02 0.06%
Facebook Inc 79.32 0.35 0.44%
Data as of 1:57pm ET
Sponsors

Sections

Guinness owner says inclusion of an LGBT group in this year's parade is reason to resume its sponsorship, though some gay rights groups are still protesting the parade's policies. More

Remember Pets.com? The Nasdaq is roaring back towards its all-time high. Here are some of the biggest dot-com busts from the last time the Nasdaq topped 5,000. More

Michael Jordan is among the newest names on Forbes' annual list of the world's richest people. The basketball star made his fortune through endorsement deals and his ownership of the Charlotte Hornets NBA team. More