Microsoft Corp., Hewlett-Packard Co. and Nike Inc. said they will buy back a combined $53 billion of shares after the stock market's 16 percent decline this year pushed down valuations and companies sought ways to invest piles of cash.
Microsoft, the world's largest software maker, will buy back up to $40 billion of stock and Hewlett-Packard, the biggest personal-computer maker, increased its repurchase program by as much as $8 billion. Microsoft and the Standard & Poor's 500 Information Technology Index last week both traded at the lowest price-to-earnings ratios on record, Bloomberg data show. Nike, the biggest maker of athletic shoes, said it will buy back up to $5 billion of shares.
More than $800 billion in announced repurchases last year helped push the S&P 500 and Dow Jones Industrial Average to all-time highs in October. Microsoft, HP and Nike increased their cash holdings over the past year.
"When companies have come in to buy their own stock subsequent to a financial crisis, they've bought at attractive prices and it's been a good use of liquidity," said Michael Holland, who oversees $4 billion as chairman and founder of Holland & Co. in New York. "I'm impressed."
U.S. companies announced $261 billion in planned buybacks this year through Sept. 18, 56 percent less than during the same period last year, according to Westport, Conn.-based Birinyi Associates Inc., the research and money-management firm founded by Laszlo Birinyi.
Microsoft rose 3.4 percent to $26.02 in New York trading today. The company added a $2 billion commercial paper program and said it may ultimately sell as much as $6 billion in debt.
Hewlett-Packard added 0.2 percent to $48.38. The buyback would equal about 166 million shares, or 6.8 percent of the stock outstanding, based on the closing price Sept. 19.
Nike dropped 1.1 percent to $63. The repurchases, which would amount to about 20 percent of Nike's outstanding shares, start when an existing $3 billion buyback plan ends, the company said.