As Stocks Slump, More Companies Planning Buybacks

Here come the stock-buyback announcements: A chorus of major companies on Wednesday announced they’ll step in to buy some of their shares on the open market, as prices have slumped.

Maytag, for example, said it will buy more of its stock this year than it originally planned. The stock has fallen from a high of $55.75 to $42.25 now.

Other firms announcing buybacks Wednesday included First Brands, Host Marriott and CBS.

Last week--as stocks plunged--49 companies announced new buybacks worth a total of $10 billion, according to Securities Data Co.

The number of announcements was the most since the week of April 25, 1997. The dollar volume was the most since the week of Dec. 19, 1997.

Securities Data counted 15 more announcements on Monday.

Using excess cash to buy back stock in the open market is a way for a company to try to support its stock price.

The latest rash of buyback announcements follows a slowdown in the second quarter, when stocks were soaring: With 254 buyback announcements in the quarter, it was the slowest quarter since the third quarter of 1995.

Still, an announcement is one thing: Whether companies actually follow through is another issue, analysts note.