CIT Group falls off S&P 500 index, to be replaced by open-source software maker Red Hat

CIT Group falls off S&P 500 index

NEW YORK — Standard & Poor’s is replacing the struggling CIT Group Inc. with software maker Red Hat Inc. in the S&P 500 index.

The switch will occur July 24 after the market closes. S&P says CIT’s value had fallen too low Friday for the bank to remain a member of the S&P 500.

New York-based CIT is one of the country’s biggest lenders to small and medium-sized businesses. The bank may have to file for bankruptcy if it can’t raise billions of dollars to cover its debt. The government gave CIT more than $2 billion in December and says it won’t bail CIT out again.

CIT’s shares have dropped since Wednesday, although they nearly doubled Friday as the commercial lender held talks with several large banks about securing emergency financing in hopes of avoiding a bankruptcy filing. They closed Friday at 70 cents.

Red Hat Inc., a Raleigh, N.C.-based company that makes a version of the free Linux computer operating system, will replace CIT in the S&P 500.