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: Vulcan, Caterpillar stocks surge as infrastructure bill’s passage gives big boost to materials makers

Shares of Vulcan Materials Co. and Caterpillar Inc. surged in premarket trading Monday, as the passage of the $1.2 trillion infrastructure bill, finally, prompted a rallying cry from investors of and construction materials and equipment companies.

The bill is expected to include $312 billion in spending on transportation, of which $109 billion is earmarked for roads, bridges and major projects, said Stifel Nicolaus analyst Stanley Elliott.

Don’t miss: Here’s what’s in the bipartisan infrastructure bill — and how it’s paid for.

“Both [Martin Marietta] and [Vulcan] have outsized exposure to aggregates, which in turn has outsized exposure to street and highway demand relative to other construction materials, such as cement and ready-mix,” Elliott wrote in a note to clients.

Vulcan’s stock

shot up 5.8%, and was among the S&P 500 index’s biggest premarket gainer, after already closing Friday at a record $196.06. Martin Marietta’s stock

ran up 5.0% premarket, putting them on track to open well above Thursday’s record close of $413.13.

Within the Dow Jones Industrial Average
the biggest premarket gainer was construction equipment maker Caterpillar Inc.’s stock
which climbed 5.5% toward a three-month high. The stock’s implied price gain would add about 75 points to the Dow’s price, while Dow futures

rallied 153 points, or 0.4%.

Elliott said other big beneficiaries of the bill include United Rentals Inc.
the largest rental company in the U.S., which through the acquisitions of Neff Corp. and General Finance Corp. has expanded its position in heavy infrastructure and construction markets. United Rentals’ stock charged up 5.6% ahead of the open.

Shares of asphalt equipment maker Astec Industries Inc.

rallied 2.5%, as Elliott said demand for the company’s equipment tends to accelerate in the two-year period following the passage of major infrastructure bills.

Among other companies Elliott highlighted as the top beneficiaries of the bill, shares of Summit Materials Inc. hiked up 9.3%
Construction Partners Inc.

rallied 4.1%, H&E Equipment Services Inc.

jumped 2.0% and Eagle Materials Inc.

gained 2.5%.

Elsewhere, steel maker stocks also rallied, with shares of Nucor Corp.

running up 6.0%, U.S. Steel Corp.

rallying 5.3% and Steel Dynamics Inc.

shot up 4.8%.

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