Freddie's dead. Fannie, get your gun.
The inevitable happened last night. The Standard & Poor's 500 index gave Freddie Mac (NYSE: FRE) and Fannie Mae (NYSE: FNM) their walking papers, booting the troubled loan enablers out of its prestigious market gauge. The curtain call comes at the end of today's trading.
Don't bother looking up a quote for the S&P 498. The index always calls up fresh rookies from the minors to take the place of its retirees. The new additions will be industrial and construction supplies specialist Fastenal (Nasdaq: FAST) and enterprise software darling salesforce.com (NYSE: CRM).
I don't have a lot to say about Fastenal, but I'm psyched to see salesforce.com earn a spot on the S&P 500 roster. Bravo, Standard & Poor's.
"You still have to go a long way to find the last Internet stock added to the index," I wrote last month, when new media splitter IAC (Nasdaq: IACID) was replaced by mutual fund giant Invesco (NYSE: IVZ).
The index replaced a dot-com company with a financial-services player a month ago. It's fitting that it should reverse that order this time around.
salesforce.com is a pretty amazing company, revolutionizing the enterprise software industry by providing cheaper Web-based solutions to standard customer relationship management applications. It's become the poster child for cloud computing. Instead of software that sits on individual PCs' hard drives, its growing number of server-stored programs makes computing truly portable.
Tim Beyers recommended Google (Nasdaq: GOOG) to Rule Breakers subscribers earlier this year, not because of the company's obvious pole position in paid search, but because of its initiatives in cloud computing. It's hard not to warm up to Google Docs as an online suite of productivity apps. It's also hard to beat the price (free for individual users).
Of course, salesforce.com isn't free, but it offers a compelling -- and convenient -- value to PC-stored dinosaurs.
Cloud computing is here to stay. It's nice to see that the S&P 500 has discovered the market's silver lining.
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