Investors don't take advantage of the fact that one of their stocks gets tossed from an important index. That was a crucial factor in the sell-off of Hawaiian Holdings shares on Monday. The airline's price dropped as fast as a plane coming in for a landing, tumbling by nearly 9% on a day when the S&P 500 index basically traded flat.
Last week the Dow Jones Indices made changes to three of its lineups, which started to kick in before the market opened today.
The company had a good run on the index. It was tapped in May 2015 to be a component, displacing the regional lender, now known as Bank OZK, when the latter was bumped to the S&P MidCap 400 index.
Hawaii Holdings has not made any official statement about the departure of the SmallCap 600. While the move shouldn't affect its fundamentals in any way, it is a psychological blow and will push it off the radar of the many index funds that target such listings for their portfolios.