Stock buyback zeal undimmed by looming Fed rate hike

New York

THE seemingly insatiable appetite of US companies for their own stock is unlikely to be satisfied soon, even if the Federal Reserve begins to raise benchmark interest rates and shares get pricier.

That would extend a pattern established in the last round of Fed tightening, according to a Reuters analysis of historical data. Many market analysts expect that higher borrowing costs won't derail the buyback boom that has been bolstering stocks.

Buybacks may lift earnings per share of companies in the Standard & Poor's 500 index by between 1.5 and two percentage points this year, according to estimates from Voya Investment Management in New York.

With earnings estimates now calling for 1.5 per cent growth for all of 2015, buybacks could make the difference between positive and n…