Standard & Poor’s Inc. on Monday announced a reshuffling of its S&P 500 Index, dropping beleaguered Los Angeles homebuilder KB Home and two other companies from the influential equity benchmark.

The S&P said it made the index changes to better reflect its preferred market capitalization ranges. Companies joining the S&P 500 list all have market caps above $5 billion. KB Home, with a share price that plunged 72 percent over the past three years as the residential real estate market collapsed, now has a market cap of $1.16 billion.

KB Home is moving to the less heavily traded S&P MidCap 400, where members have market caps between $1 billion and $3 billion. The change will cause volatility for KB Home shares for a period since exchange-traded funds based on the S&P indexes will have to rebalance their portfolios.

In addition to KB Home, former S&P 500 members Dynegy and Convergys moved to the S&P 400.

Ross Stores, Cliffs Natural Resources and SAIC rose to the 500 index.

KB Home shares closed down 6 cents, or less than one percent, to $13.21 on the New York Stock Exchange.