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Shares in Google closed 7 per cent higher on Friday, a day after Standard & Poor’s, the credit ratings agency, said it would add the internet search group to its S&P 500 index of stocks.
Inclusion in the S&P 500 marks the latest milestone in Google’s meteoric ascent from Silicon Valley upstart to one of the business world’s most influential companies.
It is likely to trigger a temporary spike in demand for Google’s shares as fund managers whose strategies rely on tracking the benchmark stock index rush to add the company’s stock to their portfolios.
The sharp rise in Google’s share price followed a dismal few weeks for the company on the stock market.
Google shares have fallen more than 25 per cent since they hit a high of $475.11 in January, amid concerns about privacy, click fraud and the potential for slower revenue growth.
However, they have increased in value more than fourfold since Google made its stock market debut at $85 in 2004.
Last month, George Reyes, Google’s chief financial officer, triggered a sell-off after he warned that the company would have to find new ways to boost revenue to stave off slower revenue growth.
The company’s shares ended $23.91 higher at $365.80 on Friday in New York.
The S&P 500 is market-weighted index of what Standard & Poor’s considers to be a representative sample of the biggest US companies.
S&P said Google would join the index on March 31. It will replace Burlington Resources, an energy group in the process of being acquired by ConocoPhillips, the oil and gas group.