Com­pany stock buy­backs on rise in 3Q

Dayton Daily News - - BUSINESS - By Mark Jewell As­so­ci­ated Press

BOS­TON — Com­pa­nies are us­ing ex­tra cash built up dur­ing the re­ces­sion to re­pur­chase stock, moves that are likely to please in­vestors who see the value of their shares rise.

But the buy­back surge may not please Pres­i­dent Obama, who is urg­ing com­pa­nies to in­stead use sur­plus cash to hire more work­ers, hop­ing to gen­er­ate jobs to sus­tain the re­cov­ery.

Stan­dard & Poor’s re­ported Mon­day that stock re­pur­chases by S&P 500 com­pa­nies more than dou­bled to $79.6 bil­lion in the July-to-Septem­ber pe­riod from $34.9 bil­lion in last year’s third quar­ter.

It was the fifth con­sec­u­tive quar­ter of in­creas­ing buy­back ac­tiv­ity among the 500 largest pub­licly traded com­pa­nies, many of them with sub­stan­tial cash hold­ings built up dur­ing and af­ter the re­ces­sion.

Stock buy­backs in­di­cate com­pa­nies have enough cash to take their shares off the mar­ket, which in­creases the value of in­vestors’ re­main­ing shares, and boosts per-share earn­ings re­sults. Buy­back growth in the lat­est quar­ter “marks the full re­turn of cor­po­rate par­tic­i­pa­tion in the eq­uity mar­kets,” S&P an­a­lyst Howard Sil­verblatt said.

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