Wall Street shuffle: S&P 500 gets new look

It’s moving day on the stock market. The line-ups of three of the 11 groups that make up the benchmark S&P 500 index are being shuffled as of Monday. Twenty companies in the index including famous names like Facebook, Alphabet and Netflix will find a new home. The biggest change will occur with telecommunications, currently the smallest grouping in the index. It gets reinvented as communication services and grows from three to 19 companies, adding some key names from the technology and the consumer discretionary sectors. The S&P's changes reflect the way the communications and media industries have evolved. AT&T and Verizon were once known as phone companies, but they're now media companies as well: AT&T just bought Time Warner, the parent of HBO and Warner Bros. movie studio, and Comcast bought NBCUniversal in 2013. Streaming services were a big reason for the telecom industry's shift, and now those companies will be in the same part of the market as Netflix. The S&P index itself will still be made up of the same 500 companies, but the moves could change how investors approach the market. The old telecommunications sector has been considered a safe bet because AT&T and Verizon pay big dividends and their stocks tend to do well when the broader market declines. The new sector looks a bit riskier. Sam Stovall, chief investment strategist for CFRA, said the new sector is characterized by "Very volatile or cyclical companies like Netflix (and) Facebook that are going to be very high growth oriented when the market is doing well, and could get absolutely slammed when the market goes down." Along with Alphabet, Facebook and Netflix, the communication services sector will include broadcasters like CBS and Discovery, cable and internet companies like Comcast, movie studios such as Disney and video game makers like Activision Blizzard. The technology sector will remain the biggest part of the stock market, although its share of the S&P 500 drops to 20 percent from 26 percent.