June 27 (Bloomberg) -- U.S. Steel Corp., the 113-year-old metal producer, will be replaced in the Standard & Poor’s 500 Index by Martin Marietta Materials Inc.
The company founded by J.P. Morgan and steel magnates including Andrew Carnegie is too small for the American equity benchmark, according to a statement from S&P Dow Jones Indices. The company, with a market value of $3.8 billion, will be added to the S&P MidCap 400 Index at the close of trading on July 1.
“It’s an old name,” Walter “Bucky” Hellwig, a senior vice president at BB&T Wealth Management, said in a phone interview from Birmingham, Alabama. “There may be some short-term price movement based on the fact that it’s not in the index, but it’s not going out of every index.”
U.S. Steel, the country’s largest producer of the metal by volume, has struggled amid overcapacity in the global steel industry and competition from cheap imports. It has posted five straight annual losses and the shares tumbled 12 percent this year. The stock was little changed in trading after U.S. exchanges closed today.
Shares of the Pittsburgh-based company were included in the Dow Jones Industrial Average in 1901. Ninety years later, when the company was called USX Corp., it was dropped.
Martin Marietta, based in Raleigh, North Carolina, has seen its shares rally 32 percent in 2014. It has a market value of about $6.1 billion and the U.S. Justice Department yesterday approved its $2.7 billion purchase of Texas Industries Inc., helping the company gain entry into the cement market amid a recovery in the construction industry.
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