For two trading days, the Standard & Poor's 500 was really the S&P 498. Fannie Mae (FNM) and Freddie Mac (FRE) were ejected at the...

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For two trading days, the Standard & Poor’s 500 was really the S&P 498.

Fannie Mae (FNM) and Freddie Mac (FRE) were ejected at the Wednesday close, after a government takeover amid massive mortgage losses caused their shares to plunge.

Their replacements, (CRM) and Fastenal (FAST), weren’t added until Friday, mainly to allow S&P 500 index funds time to make adjustments, says S&P spokesman Dave Guarino.

S&P blamed the mortgage companies’ shrunken market caps for the disruption, saying the minimum “a company must maintain in order to be eligible for admission to the index is $5 billion.” But Bespoke Investment Group notes 119 companies in the index are below that threshold, which would make it “the S&P 381.”

Guarino says S&P also considers shares outstanding and liquidity. “Just because they don’t meet the market-cap guideline, it doesn’t mean they automatically get removed,” he says.

Nest-egg autopilot

Since the Pension Protection Act became law two years ago, companies are taking advantage of the ability to automatically enroll workers in retirement plans, according to Vanguard. More than 300 company plans administered by Vanguard used auto enrollment in 2007, three times as many as in 2005.

Paw prints

Here’s hoping for small, steady gains, as opposed to huge one-day swings for stocks. Leuthold Group analysts note such swings are “common bear-market ‘paw prints,’ ” while “small but relentless daily gains … usually accompany a new bull market.”

The top five one-day percentage gains for the S&P 500, based on data since 1940, occurred during bear markets. March 18 marked the biggest one-day gain of 2008 but only the 21st-largest since 1940, with a jump of 4.24 percent. The Federal Reserve that day slashed its benchmark interest rate by 0.75 basis point.

The Associated Press