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.