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InvestmentsU.S. stock buybacks head for record in third quarter By Reuters

U.S. stock buybacks head for record in third quarter By Reuters


© Reuters. FILE PHOTO: A Wall St. road signal is seen close to the New York Stock Exchange (NYSE) in New York City, U.S., September 17, 2019. REUTERS/Brendan McDermid

By Caroline Valetkevitch

NEW YORK (Reuters) – Total U.S. company stock buybacks are on observe to hit a record for the third quarter because the U.S. economic system bounced again from the worldwide pandemic and chief executives grew to become much less scared of spending money.

corporations in current weeks have disclosed buybacks totaling $145 billion for the third quarter, and the full is prone to surpass $224 billion by the point all experiences are in, Howard Silverblatt, senior index analyst at S&P Dow Jones Indices, stated on Tuesday.

That can be above the $223 billion in buybacks recorded in the fourth quarter of 2018, which was a record, he stated.

Share repurchases are seen as supportive for shares in basic. They lower the variety of an organization’s shares excellent, boosting per share earnings and driving down the price-to-earnings ratio, a key valuation benchmark.

Still, stock costs have gone up, and that is impacting the variety of shares corporations can purchase again, Silverblatt stated.

The S&P 500, which hit a record excessive on Tuesday, is up about 23% for the yr up to now.

Strategists count on corporations will proceed to spend excessive ranges of money in 2022, a development that ought to assist to help shares.

Goldman Sachs (NYSE:) strategists wrote in a current notice that money balances have surged in the final 12 months, and they’re projecting S&P 500 buybacks to develop by 8% in 2022 after 50% progress in 2021.

Among current huge bulletins, Exxon Mobil (NYSE:) final Friday vowed to revive its long-dormant share repurchase program subsequent yr.

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