(By Tim - iStockAnalyst Writer) Having your company's stock added to a major market index like the S&P 500 is usually a short term positive for the stock price. The addition of a stock force the managers of index tracking mutual funds and exchange traded funds to purchase shares to keep their portfolios in line with the index. Yesterday Standard & Poor announced a pair of changes to the S&P 500 index.

First, the basics of the S&P 500: From the Standard & Poors website the index is: "Widely regarded as the best single gauge of the U.S. equities market, this world-renowned index includes 500 leading companies in leading industries of the U.S. economy." The index is market cap weighted and includes approximately 75% of the market value of U.S. stocks. Let us take a look at the new additions.

Budweiser (NYSE:BUD), is out of the S&P 500 due to the fact it is being purchased by Belgian beer maker ImBev NV. Replacing BUD in the index will be Stericycle, Inc., NASD:SRCL. Stericycle is a $5 billion market cap company that provides regulated medical waste management services. On the not as highly followed S&P 100, BUD will be replaced by pharmaceutical company Wyeth, NYSE:WYE.

Life Technologies Corp.(NASD:LIFE), with be joining the S&P 500 to replace Applied Biosystems, Inc. NYSE:ABI. Applied Biosystems is being purchased by Invitrogen Corp NASD:IVGN, to create one of the world's largest life science research companies. The newly merged company will be known as Life Technologies and trade on the NASDAQ under the LIFE symbol. If like me, you tried to look it up and found nothing, the merger is scheduled to occur on November 21. Currently Applied Biosystems and Invitrogen have a combined market capitalization of about $6.3 billion.

For short term traders it appears that Stericycle has the best opportunity for a short term price increase this week. I am not sure how the index funds will handle the merger of ABI and IVGN into LIFE. I would assume they will wait until the new LIFE starts trading. A savvy trader might find an opportunity for profit in the current shares of ABI and IVGN prior to the official merger and inclusion into the S&P 500. ABI shareholders are scheduled to receive a combination of cash and IVGN stock. The deal was originally valued at $38 for each share of Applied Biosystems, of which 45% would have been cash. The most recent news release I could find indicated that ABI shareholders could elect to receive cash, stock or a combination of cash and stock. As I noted earlier, there could be a possibility for a savvy trader to find some arbitrage opportunity there and if the new LIFE stock is added to the S&P 500 next week that could push the stock price higher. I will be watching the outcome with interest.