S&P 500 Changes on Tap in New Year

The S&P 500 and S&P 100 indices will undergo a makeover at the close of trading Wednesday, the last day of 2008, following the finalization of three mergers of financial companies.

Merrill Lynch (MER Quote) and Wachovia (WB Quote), acquired earlier this year by Bank of America (BAC Quote) and Wells Fargo (WFC Quote), respectively, will be deleted from the S&P 500 and S&P 100 indices at the close of trading, pending final approvals.

In October, Wells Fargo said will pay $15.1 billion for Wachovia in an all-stock transaction, beating out a previous bid by Citigroup (C Quote) that would have seen the Federal Deposit Insurance Corp. take on the majority of risk in Wachovia's loan portfolio. That followed the September acquisition of Merrill Lynch by Bank of America in a deal worth $50 billion, which came on the heels of the Lehman Brothers bankruptcy.

Amazon.com (AMZN Quote) will replace Merrill and Costco Wholesale (COST Quote) will take the place of Wachovia on the S&P 100. S&P MidCap 400 constituent SCANA Corp. (SCG Quote) will replace Merrill Lynch in the S&P 500, and Owens-Illinois (OI Quote) will replace Wachovia in the S&P 500.

Additionally, S&P MidCap 400 constituent FLIR Systems (FLIR Quote) will replace National City in the S&P 500. PNC Financial (PNC Quote) said in October it will buy National City for $5.2 billion in stock, in a deal that closed earlier this month.

As part of the deal, PNC said it had been accepted to take part in the U.S. Treasury's $250 billion capital initiative under the Troubled Asset Relief Program, or TARP, by selling $7.7 billion of preferred stock and related warrants to the government.

The S&P 500 has already deleted several financial companies over the course of 2008, many of which were casualties of the credit crisis. Washington Mutual, Lehman, Freddie Mac (FRE Quote), Fannie Mae (FNM Quote), Countrywide, Ambac Financial (ABK Quote), Bear Stearns, and Commerce Bancorp were all replaced on the S&P 500 over the last twelve months.