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Strategies & Market Trends : VOLTAIRE'S PORCH-MODERATED -- Ignore unavailable to you. Want to Upgrade?

To: stockman_scott who wrote (41824)	9/16/2001 7:44:47 PM
From: Dealer	Respond to of 65232

FleetBoston Moves to Support Market By Thi Nguyen and Jean Scheidnes NEW YORK (Reuters) - Banking group FleetBoston Financial Corp. (NYSE:FBF - news) on Sunday unveiled a $4 billion stock buyback plan, the largest in a wave of such programs by U.S. companies that are seen as attempts to prop up stock prices when U.S. markets reopen on Monday after a four-day closure. In the 5 days following the Sept. 11 air attacks that toppled the World Trade Center and damaged the Pentagon (news - web sites), 31 companies including computer networking giant Cisco Systems Inc. (Nasdaq:CSCO - news) and No. 1 U.S. tax preparer H&R Block Inc. (NYSE:HRB - news) set new or increased share repurchase programs in a bid to shore up investor confidence. Federal securities regulators did their part by announcing emergency trading rules on Friday that allow publicly traded companies to repurchase their shares without meeting the usual volume and timing restrictions. Under regular Securities and Exchange Commission (news - web sites) rules, corporations are restricted from buying back their own shares under certain circumstances, and buybacks are disallowed at the market open and near the close. The buyback plan of Boston-based FleetBoston, which also owns brokerage Quick & Reilly and investment bank Robertson Stephens, reflects its confidence in both its stock and the U.S. financial system, the company said. ``Our conviction about the long-term value of our franchise is matched only by our confidence in the enduring strength of the financial industry and markets,'' Chairman and Chief Executive Terrence Murray said in a statement. ``This move represents an active pledge of our considerable capital to support our beliefs on both fronts.'' The $4 billion buyback, which was authorized until the end of 2002, represents about 10 percent of FleetBoston's outstanding shares, based on last Monday's closing share price of $34.93, the company said in a statement. The markets were closed from Tuesday because of the hijack attacks. Although companies have authorized buybacks, actual transactions will depend on how stocks fare when the markets reopen. Money managers say investor fears about the economic impact of the attacks may knock stock prices down, but selling may be tempered by an interest in supporting the nation and the stock market. Repurchasing stock reduces the number of shares outstanding a company has, and increases the company's earnings per share because profits are then spread across fewer shares. That can, in turn, help boost the stock price. For companies that award many stock options to employees, buybacks can also offset the dilution caused by the exercise of those options. Other U.S. companies that have announced stock buyback plans include coal producer Arch Coal Inc. (NYSE:ACI - news), wireless telephone operator Dobson Communications Corp. (Nasdaq:DCEL - news), real estate firm Boston Properties Inc. (NYSE:BXP - news), software company BEA Systems Inc. (Nasdaq:BEAS - news) and First Data Corp. (NYSE:FDC - news), which operates networks used for credit card purchases. The Shaw Group (NYSE:SGR - news), EXCO Resources (Nasdaq:EXCO - news), Webster Financial Corp. (Nasdaq:WBST - news), Insituform Technologies (Nasdaq:INSUA - news) and Mobius Management (Nasdaq:MOBI - news) also announced new programs. Pfizer Inc. (NYSE:PFE - news), the world's No. 1 drugmaker, said it would continue its existing buyback program when equity markets reopen. Abroad, 35 companies on the Hong Kong exchange repurchased their shares in trading Wednesday through Friday. Considering that U.S. equity markets weren't even open, the number of buyback announcements may indicate that more are to come, David Friedman, editor at the newsletter BuyBackLetter.com, said on Friday. In 1987, after the market declined by a third following the October crash, more than 700 companies listed on the New York Stock Exchange (news - web sites), the American Stock Exchange and the Nasdaq market announced new or increased share buyback plans worth $45 billion largely because of their low or depressed share prices, according to Friedman.