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Quadruple Witching and S&P 500 Rebalancing

The S&P 500 will be rebalanced at the close today, an event that happens four times a year. It can happen when companies buy back stock (thus increasing their weighting in the index), or when market capitalizations fall below or above certain levels.

Today, it's about market capitalization. It's about getting rid of the old guard (media & photography companies) and installing a new guard (networking companies, oil & gas exploration).

S&P 500: New Adds

Netflix , F5 Networks (makes networks more efficient), Newfield Exploration (oil and gas exploration & production), and Cablevision , which is replacing King Pharmaceuticals , being bought by Pfizer .

S&P 500: New Deletions

New York Times , Office Depot , and Eastman Kodak , all demoted to the S&P Midcap Index. Why? Because they are barely above $1 billion...and normally $3.5 billion is the lower levels for large-cap inclusion.

There are others, of course, in fact 41 companies have market capitalizations below $3.5 billion in the S&P 500. Why aren't they out? The S&P 500 has to have representation across the spectrum of industries, even if they are below certain desirable levels.

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  • A CNBC reporter since 1990, Bob Pisani covers Wall Street from the floor of the New York Stock Exchange.

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