Out of the Gate: OfficeMax shares slide

Shares declined 99 cents, or 5.4 percent, to $17.11 in morning trading, after dropping to a 16-year low of $17.04 shortly after the opening bell.

Standard & Poor's said late Thursday coal producer Massey Energy Co. would replace OfficeMax on the S&P 500, effective at Friday's close of trading, citing the decline in its market value.

Credit Suisse analyst Gary Balter downgraded the stock to "Neutral" from "Outperform" and cut his price target by $5 to $20 because of the weak economy and tough competition.

"We were disappointed that this management team has elected to fight from a third place position in a tough macro market, rather than try to join the leader and with Staples Inc. and Corporate Express NV a near certainty, that takes away our primary reason for recommending the stock," Balter wrote in a client note.

Last week, Staples succeeded in its bid to buy Dutch office supply distributor Corporate Express for about $2.7 billion, or $14.36 per share.

Balter said a takeover of OfficeMax by Staples is now "off the table" because Staples will be consumed with integrating Corporate Express.