Friday will see the launch of the brand-new S&P Communications Services sector, a reshuffling of major industry groups that will impact some of the most widely followed and traded names on Wall Street. The new sector includes both companies that facilitate communication operations, as well as ones that offer the content and information. The move was seen as a way to address how some companies span multiple sector categories and don’t always reflect the industry they’re currently classified in.
The new sector will include companies that are currently in three different industry groups: telecommunications, including AT&T and Verizon Communications; technology, including Facebook and Google parent Alphabet; and consumer discretionary, where Walt Disney and Netflix are making the shift.
The new sector will account for nearly 10 percent of the S&P 500’s market capitalization. The weighting of the technology sector will drop from about 26 percent of the overall market to 21 percent, though it will remain the single biggest influence. The discretionary sector will drop to 10 percent from roughly 13 percent.
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