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Adding Tesla to the S&P 500 shows why the indexes are so strange



Fans of Tesla Inc. celebrated last week when the electric carmaker was accepted into the S&P 500, with its shares up 22% in two days.

Step back from the outstanding profits, and the fact that the seventh-largest U.S. company by market value has only just been admitted to the index of the 500 most valuable stocks in the country is strange. But this is only the most obvious of the very strange but stock-changing ways that index roaring markets. Indices play two important but often contradictory roles: They measure broad …


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