Buybacks surged as stocks fell

Corporate America’s stock-buyback machine has kicked into higher gear with the drop in share prices the last two weeks, new data show. That may have helped cushion the market’s losses as some investors fled.

Fifty-four companies announced stock buybacks last week, according to TrimTabs Investment Research in Santa Rosa, Calif. That was the most since the week of Sept. 17, 2001 -- when the market was plunging in the aftermath of the Sept. 11 terrorist attacks, TrimTabs said.

Another wave of buyback announcements came Thursday. Hotel giant Marriott International Inc. said its board authorized the repurchase of 40 million shares over time, bringing its total buyback authorization to 51 million shares, or nearly 13% of outstanding shares. Marriott stock rose $1.21 to $43.31.

Shares of Santa Monica-based FirstFed Financial Corp., which have been battered with other mortgage lenders’ stocks this year, jumped $3.22 to $46.04 after the company said it would buy back 1.5 million shares, or about 10% of shares outstanding.

Under a previous buyback program, FirstFed said it had purchased nearly 1.4 million shares since Jan. 1, at an average price of $54.27.

Stock repurchases have reached record levels the last two years, according to Standard & Poor’s. Many companies say buybacks are one of the best ways to reward shareholders: By buying their own shares in the market, companies can directly support the price.

What’s more, by reducing their share count, companies can boost per-share earnings, in theory making their remaining shares outstanding worth more.

Still, some critics say buybacks can be a misuse of shareholders’ capital if companies are repurchasing stock instead of using cash to reinvest in their businesses for long-term growth.

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