This Stock Is Replacing Walgreens in the S&P 500

The stock will replace Walgreens Boots Alliance, which is in a deal with private-equity firm Sycamore Partners. (Tiffany Hagler-Geard/Bloomberg)

Shares of Interactive Brokers only got an initial bounce following news that it is joining the S&P 500 this week. It will replace pharmacy retailer Walgreens Boots Alliance before trading opens on Thursday.

Interactive Brokers stock jumped 4.2% to $65.54 in premarket trading Tuesday in reaction to the news, but quickly fell back to near its prior close and was trading flat in midday trading.

Stocks added to the S&P 500 tend to get a bounce as funds that track the index, such as the SPDR S&P 500 ETF Trust , add the shares to their holdings.

The Greenwich, Conn.-based brokerage firm and current S&P MidCap 400 constituent trades on the Nasdaq under the ticker symbol “IBKR.”

Walgreens is being acquired by the private-equity firm Sycamore Partners in a deal expected to be completed soon, S&P Dow Jones Indices said.

Interactive Brokers was founded by Thomas Peterffy nearly 50 years ago. The company serves individual investors, financial advisors, and institutional clients, such as hedge funds. In recent years, Interactive Brokers has picked up more customers and assets as it expanded its offerings for retail investors to include cryptocurrencies and event contracts, which enable investors to effectively bet on the outcome of particular events.

It also has a robo-advisor for customers to who want a hands-0ff approach to managing their money. Interactive Brokers had 3.87 million customer accounts as of the end of the second quarter, a 32% increase from the same period a year ago. Shares of Interactive Brokers are up 97% over the past 12 months.

The company competes with Charles Schwab and Robinhood Markets for retail investors. Robinhood has also been considered a potential contender to join the S&P 500.

Talen Energy, which produces and sells electricity, will replace Interactive Brokers in the S&P MidCap 400, also before trading opens on Thursday.

Kinetik Holdings, a provider of oil and gas production and distribution services, will replace Pacific Premier Bancorp in the S&P Small Cap 600, effective before trading opens on Tuesday, Sept. 2. S&P MidCap 400 constituent Columbia Banking System is acquiring Pacific Premier Bancorp in a deal expected to close soon, pending final closing conditions.

Write to Janet H. Cho at janet.cho@dowjones.com