S&P said Thursday that stock buybacks in the S&P 500 reached $116 billion during the second quarter, up 175 percent from the same period in 2004 and eclipsing the $104 billion level set in the fourth quarter of 2005.
"The record $116 billion in buybacks is the result of over 40 percent of the S&P 500 companies reducing their share count during the second quarter," said Howard Silverblatt, a senior index analyst at Standard & Poor's.
"The unprecedented expenditure on buybacks and the resulting share count reduction is having a material affect on both earnings-per-share and cash flow. Left unabated, this will eventually impact the supply of open market shares, and therefore the share price itself."
S&P also said that companies are spending as much on stock buybacks as they are on capital expenditures.