Shares of Ciena Corp. took a hit Monday after Standard & Poor's announced the telecommunications equipment maker would be replaced by Visa Inc. on the S&P 500 index.
S&P said Friday that Visa would take Ciena's place on the index Dec. 18 because Ciena is one of several companies in the index no longer representative of the market indicator. Dynegy Inc., KB Home Inc. and Convergys Corp. are being dropped from the S&P 500, too.
Ciena, based in Linthicum, Md., provides communications networking equipment, software and services. Last week it posted a wider-than-expected loss for its fiscal fourth quarter and full year as costs more than offset strong revenue.
The company is also in the process of acquiring assets from Nortel Networks Corp. for $530 million, which has some analysts worried in part because of the size of the business that Ciena is poised to buy.
In a deal slated to close sometime in the first quarter, Ciena would take over Nortel's global optical networking and carrier ethernet businesses. It would get all products, contracts, and intellectual property, including technology that boosts the speed and capacity of fiber optic networks.
Ciena's shares fell 44 cents, or 3.8 percent, to $11.06 in morning trading. In the past 52 weeks, the stock has traded between $4.98 and $16.64.
Meanwhile, Visa shares added $2.65, or 3.3 percent, to $83.99. They earlier set a new 52-week high of $85.91.