Cisco Systems, Intel, 3Com and many other hi-tech companies took advantage of relaxed New York Stock Exchange regulations on Monday, the day on which the stock market reopened, to buy back shares and steady the market after last week's terrorist attacks.
Stock buybacks allow companies to reduce the total number of shares outstanding and, as a result, improve earnings on a per-share basis. When a company does this it is usually a sign that it is confident of its future prospects.
Intel said it would buy 300 million outstanding shares as part of a repurchase programme. Cisco last week said its board authorised the company to buy back as much as $3bn worth of its stock over the next two years.
"We have tremendous confidence in the financial systems of our country, in our industry, and in our market-leading position both today and into the future," said Cisco chief executive John Chambers.
Compaq confirmed that it will repurchase up to $550m of the $1bn worth of its own stock authorised by its board in December, while Hewlett Packard has said it will buy back about $1.8bn worth of stock.
Many other hi-tech companies, such as Akamai Technologies, Bea Systems, E-trade and Solectron, joined the host of more than 75 firms in announcing or expanding buybacks.
This was the first time that the Securities and Exchange Commission used its emergency powers to ease regulations and take special measures to make buying stocks easier.
Public companies are now allowed to repurchase their own securities without meeting the usual strict volume and timing restrictions. For example, businesses are not usually allowed to buy their own stock in the first and last 30 minutes of trading.
In addition, public companies can now repurchase shares without adverse accounting consequences, and may increase daily purchases of their stock to 100 per cent of the previous month's daily average volume, up from 25 per cent. The waivers are in effect for up to 10 days.
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