The Buyback Boogeyman May Have Struck Again
A steep sell-off in stocks coincides with a blackout period for corporate repurchases.
The bears have it.
Photographer: Alex Kraus/Bloomberg
The buyback boogeyman may have just bit investors once again.
The Dow Jones Industrial Average fell more than 800 points on Wednesday and the S&P 500 Index dropped nearly 3.3 percent, one of the biggest slumps of the year. Market participants and observers were pointing fingers at a lot of reasons but may have glossed over an important one: the so-called buyback blackout period. Companies are prohibited from repurchasing their shares in the month before they release their earnings. Earnings announcement will start in earnest at the end of this week, which means we are at the tail end of the blackout period.