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June 24, 1998| Bloomberg News

Some investors Tuesday found another justification for paying stratospheric prices for Internet-related stocks: rumors that some of the best-known Internet issues would be added to the blue-chip Standard & Poor's-500 stock index.

That speculation helped push Internet search vehicle Yahoo Inc. up $8.50 to a record $148.06 and America Online up $5.13 to a record $106.25.

Inclusion in the S&P means guaranteed demand for a stock from increasingly popular "index" mutual funds that simply buy and hold those issues.

After the close of trading, Standard & Poor's Corp. did indeed announce changes in the S&P 500. But the additions were Bear Stearns Cos., SLM Holding Corp., IMS Health Inc. and Capital One Financial Corp. No Internet stocks were added.

David Blitzer, chairman of the S&P-500 index committee, said it stands to reason that Internet companies will be added to the index sooner or later.

"Our view is that the S&P represents leading companies and leading industries," Blitzer said. "Given the size and growth of Internet companies, I think over time leading companies will include Internet companies."


Ed Keely, manager of the $2-billion Founders Growth Fund in Denver, is leaving to join cross-town rival Janus Funds.

Keely, 32, will manage institutional money for Janus. Founders said it is searching for a replacement.

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