Stock buybacks could inflate S&P 500 quarterly earnings
BOSTON (AP) -- America's biggest corporations rewarded shareholders by spending more money on stock repurchases for the ninth consecutive quarter, to the point that it could significantly pad companies' fourth-quarter per-share earnings, Standard & Poor's said Wednesday.
Stock buybacks by companies in the S&P 500 index totaled $118 billion in the July-September period. That's up nearly 49 percent from about $80 billion in last year's third quarter. Buybacks rose 8 percent compared with this year's second quarter.
Repurchases have increased each quarter since the second quarter of 2009, when the financial crisis sent buyback spending down to $24 billion. However, they remain below their historic peak in the third quarter of 2007, when repurchases totaled a record $172 billion.
Buybacks reward investors by increasing the value of remaining shares and lifting per-share earnings results. Shares are taken off the market, and earnings are divided among fewer shares.
Mudd takes leave of absence
NEW YORK (AP) -- Former Fannie Mae CEO Daniel Mudd announced he would take a leave of absence from the hedge fund he runs Wednesday, less than a week after being charged in connection with the 2008 financial crisis.
Mudd is one of six former executives at Fannie Mae, the Federal National Mortgage Association, and Freddie Mac facing civil fraud charges from the Securities and Exchange Commission.
The executives are accused of understating the level of high-risk subprime mortgages that Fannie and Freddie held just before the housing bubble burst.
Fannie and Freddie have cost taxpayers more than $150 billion to date -- the largest bailout of the financial crisis. Regulators say that tab could hit $259 billion.
The companies have since essentially become wards of the state.
EU court keeps carbon law
AMSTERDAM (AP) -- U.S. airlines failed Wednesday to block an EU law charging airlines flying to Europe for their carbon pollution. The decision by an EU court was widely hailed by environmentalists, but the Fitch ratings agency said it raised the specter of a global trade dispute.
The European Court of Justice in Luxembourg dismissed arguments that imposing the European Union's cap-and-trade carbon credits program on flights to and from European airports infringes on national sovereignty or violates international aviation treaties. U.S. and other non-European airlines had sued the EU, arguing that they were exempt from the law.
Environmentalists called the law a first step in controlling carbon emissions in a key economic sector, and EU officials said they expected airlines to comply.
J&J loses Risperdal ruling
TRENTON, N.J. (AP) -- A South Carolina judge has upheld a $327 million civil penalty against Johnson & Johnson, which was found guilty by a jury of overstating the safety and effectiveness of antipsychotic drug Risperdal.
Attorneys for the state say it's the biggest verdict in the country over the marketing of Risperdal. The pill for schizophrenia and bipolar disorder once brought J&J more than $3.4 billion in annual sales.
But it's been mired for years in litigation over alleged kickbacks, promotion for unapproved uses and other efforts to boost Risperdal over competing drugs.
J&J of New Brunswick, N.J., says it will appeal the South Carolina ruling.
Walgreens' earnings dip
NEW YORK (AP) -- Walgreens' first-quarter earnings fell more than 4 percent due, in part, to a slow flu season and its impending split from the Express Scripts pharmacy network.
Since June, Walgreens and Express Scripts have said they were preparing to stop doing business when the three-year contract expires at the end of 2011. Walgreens gets $5.3 billion in annual revenue from Express Scripts, but the Deerfield, Ill., company has said it would rather give that up than continue filling unprofitable prescriptions.