Facebook to join S&P 500 index

Facebook made its stock market debut on the Nasdaq exchange in May 2012

A little over a year after its stock market debut, Facebook has joined the S&P 500 index of some of the world's largest firms, replacing test equipment maker Teradyne.

Companies in the S&P 500 can be listed on either the Nasdaq or New York Stock Exchange.

The S&P 500 is considered the best representation of the US stock market and a bellwether for the US economy.

Facebook shares jumped 4% after hours on the news.

After a botched public offering in May 2012, Facebook shares slid to less than half of their initial $38 (£23; 28 euro) price, before recovering during the summer of 2013.

The company has been pleasing investors recently, notching better than expected earnings and strong mobile advertising sales, a crucial metric watched by analysts.

It is now worth a little over $122bn (£74bn).

Other firms added to the S&P 500 are Alliance Data Systems and flooring company Mohawk Industries.

They replace retailer Abercrombie & Fitch and JDS Uniphase, a maker of optical technology.