By contrast, the number of biotechnology firms on the two lists shows movement in both directions with 17 rising into the Russell 3000 and 15 others falling out of it.

The additions list also includes 16 medical specialties and 12 internet software/services companies.

"Russell's index reconstitution process each year objectively captures the changing fortunes of companies and industries in the U.S. equity market," said Lori Richards, senior product manager, Russell Indexes. "We don't see as much change this year. The bear market took a nearly equal swipe at companies in every index and sector."

She added that Russell posted on its website today updated lists of companies set for addition to — or deletion from — the ranking of stocks that make up its 21 U.S. equity indexes. Final index membership goes into effect July 1 and will remain in place for one year.

Among the 50 states, California leads the way on the list of preliminary additions as 54 companies, nearly 20% of the total, are based in the Golden State. The next five states represented on the additions list are: New York (23 companies), Virginia (20), Florida (19), Pennsylvania (16) and New Jersey (15).

But California also is home to a comparable number of stocks on the preliminary list of deletions. Those states with the most companies on the preliminary deletions list are California (49), New York (15), Texas (14), Florida (10) and Massachusetts (10).

Looking at net gain — number of companies on the additions list minus those on the deletions list — the index reconstitution process shows Virginia on top with a net gain of 19, followed by Pennsylvania (11) and Florida (9).

By contrast, Colorado, Indiana and Texas will likely realize a net loss of two companies each in the Russell 3000.

"The rotation of who's in and who's out of Russell indexes shows the changing nature of U.S. equity markets," said Richards. "We see pockets of success across the country, but by and large it was a relatively dull year in relation to the dramatic change our process captured during the Internet frenzy and subsequent crash."

She added that 68% of the companies on this year's list of deletions reported negative earnings in the past year or have gone bankrupt.

These preliminary lists of additions and deletions to the Russell 3000 represent the first steps in Russell's annual index reconstitution process — a procedure that adjusts Russell's stock indexes to reflect current market capitalization and style attributes. The final rebalanced lists will be available July 9 on russell.com.

Annual reconstitution of the Russell indexes captures the 3,000 largest U.S. stocks as of the end of May, ranking them by total market capitalization to create the Russell 3000. The largest 1,000 companies in the ranking comprise the Russell 1000 while the remaining 2,000 companies become the Russell 2000.

About Russell
Frank Russell Company, a global leader in multi-manager investment services, provides investment products and services in more than 35 countries. Russell manages more than $76 billion in assets and advises clients worldwide representing more than $1.6 trillion. Founded in 1936, Russell is a subsidiary of Northwestern Mutual and is headquartered in Tacoma, Wash., with additional offices in New York, Toronto, London, Paris, Singapore, Sydney, Auckland and Tokyo.

Contact: Steve Claiborne 253.594.1858