Several S&P 500 Companies Step Up Capital Spending Faster Than Share Buybacks

Big U.S. companies, including Alphabet Inc GOOG, General Motors Company GM, and PepsiCo Inc PEP, have increased spending on real estate, equipment, and technology.
According to the Wall Street Journal report, the move is an encouraging signal to investors amid uncertain macroeconomic trends.
Based on results from roughly two-thirds of the companies in the S&P 500 index, capital expenditures have risen 20% from a year earlier to $149.8 billion, roughly in line with the first quarter’s growth rate. Share repurchases have climbed 10% to $160.8 billion, and dividends have increased 14% to $140.6 billion.
The spending boom has offered a leg of support to a stock market that is off course amid soaring inflation.
According to a Bank of America analysis, companies in the information-technology, communications-services, and industrials sectors have been the most significant contributors to capital-expenditure growth.
Some companies are tightening their belts amid potential recession fears. Intel Corporation INTC cut its capital spending forecast for 2022 after reporting a surprise quarterly loss and its biggest revenue decline in over a decade.