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Friday, March 29, 2024

US share buybacks at record level in Q3

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NEW YORK—US corporate share repurchases keep setting new records, a trend some experts expect to persist despite bipartisan unease on Capitol Hill and a weaker economic outlook that could crimp profits.

Fueled with windfalls from the 2017 tax cut and cheap debt, companies in the S&P 500 spent $203.8 billion buying back their own stock in the third quarter, the third consecutive new record, according to S&P Dow Jones Indices.

Stock buybacks boost share prices and make profits look bigger by increasing earnings per share,  a key Wall Street benchmark.  

Boeing shares rose nearly four percent on Tuesday after it announced it was boosting its share repurchase plan to $20 billion from $18 billion and increasing its dividend.  

But those share repurchases are financed by funds that might otherwise go to hire workers or invest in new projects, which could create more jobs.  

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Critics include Republican Senator Marco Rubio, who plans to introduce tax legislation to discourage buybacks in favor of business investment that restores “the dignity of work.”

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