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Circuit City Dropped From S&P 500

3/21/2008 12:44:00 PM Eastern

New York — Standard & Poors is dropping Circuit City from its key S&P 500 stock index.

The retailer will be replaced by Philip Morris after the close of trading on Friday, March 28.

Standard & Poors removes companies from the index that “substantially violate” one or more criteria. Considerations for removal include inadequate stock liquidity, which can be due to a very low share price, and failure to maintain four consecutive quarters of positive earnings.

Circuit City lost $208 million during its third quarter, and its share price plummeted 76 percent last year.

Removal from the S&P 500 can have an adverse affect on a company’s share price, as the composition of many stock index mutual funds are based on the Standard & Poors listing.