Stock Buybacks Retreat 44% in Second Quarter; Cash holdings goes up

As uncertainty grew and commitment to significant cash outflows for purchases declined, buybacks pulled back from their record highs. S&P 500 stock buyback activity slowed considerably during Q2,’08, posting its lowest level since Q3,’05. The $87.9 billion in stock buybacks during the second quarter represented a 44.3% decline over the $157.8 billion spent during the second quarter of 2007. The actual dollar level of buybacks however remains at a historically high level, partially due to the need to satisfy stock options. I anticipates that the Q3,’08 period will also show a significant decline in stock buybacks due to the uncertainty in the market, and the comparison to the record $172 billion spent on buybacks during Q3,’07.

To continue reading this article you must be a Bloomberg Professional Service Subscriber.