Outside of the Dow Jones Industrial Average (DJIA), the Standard & Poor's (S&P) 500 may stand as the most well-known market barometer in the world. Developed in 1957, the S&P 500 was the industry's first market capitalization-weighted stock market index. To qualify for the index, companies must meet liquidity, size and financial viability requirements, and must be incorporated in the United States.

The S&P 500 is a fluid index, which means that certain components are removed and replaced from time to time. For example, companies may be removed if they get acquired by another company or are in some type of financial distress. Replacing components of the index is fairly common. In 2015, 24 changes were made to the S&P 500's composition.

Occasionally, a well-known name gets dropped from the index. Companies that were once industry leaders may fall on hard economic times or go bankrupt. There are several reasons why a company may get removed from the index, as can be seen by looking at the Index's history of dropped companies.

Sears

Sears Holdings Corp. (NASDAQ: SHLD) was the United States' largest retailer until 1989, when it lost market share to its competition. The company failed to adapt to the new online economy and its revenues experienced a steady decline.

Sears was still the 12th largest retailer as of October 2013. But it closed more than 100 stores in 2018. It has reported over 30 straight quarters of year-over-year declines in revenue. It was officially removed from the S&P 500 on Sept. 4, 2012, after being listed for 55 years.

Lehman Brothers

Lehman Brothers is a prime example of everything that went wrong when the housing bubble burst in 2007. Like many financial institutions at the time, Lehman overextended itself by taking on billions of dollars in bad loans. Those bad loans resulted in a badly damaged balance sheet and, ultimately, insolvency.

Lehman Brothers' bankruptcy filing in September 2008 still ranks as the biggest in U.S. history. It was still the fourth-largest investment bank in the country at the time of the filing. The company was removed from the S&P 500 on Sept. 16, 2008.

Dell Computer

Dell Computer's removal from the S&P 500 came as a result of the company's decision to cease being a publicly held company. Founder Michael Dell and private equity firm Silver Lake Partners bought the company in whole for around $25 billion and took it private after a fight with billionaire activist investor Carl Icahn for control of the company. Dell was officially dropped from the S&P 500 on Oct. 28, 2013, after a 17-year run on the index.

Avon Products

Avon Products (NYSE: AVP) left the S&P 500 on March 20, 2015. Revenues and net income from the former cosmetics giant have been in steady decline for the last several years due to the emergence of many competitors in the direct-selling beauty and household products industry. The stock has lost almost 90% of its value over the past five years.

Avon Products' stock was removed from the S&P 500 after 50 years on the index and moved over to the S&P 400 Index, a similarly structured index consisting of mid-cap companies.

Radio Shack

Radio Shack Corp. is another unfortunate victim of the new economy. Once a go-to location for electronics products, Radio Shack revenues fell significantly as competitors like Best Buy, Amazon.com and Wal-Mart began dominating its niche. The company took measures in 2000 to remain relevant, but management issues and failed strategy changes ultimately led to the company's demise.

Radio Shack's stock was removed from the S&P 500 in June 2011, and the company filed for bankruptcy protection in February 2015. Its remaining assets were sold to Standard General a month later.