U.S. stocks skyrocketed, pushing the Standard & Poor’s 500 Index toward a record high, as Microsoft Corp. declared a $40 billion buyback and Federal Reserve policy makers united for a two-day policy assembly. Whipsawed Stocks Growing speculation about stimulus cuts has whipsawed stocks since May, when Fed officials first indicated reductions could start this year. The S&P 500 plunged 5.8 percent from a record on May 21 through June 24. It bounced back 8.7 percent to close at its latest all-time high before slumping as much as 4.6 percent from that level. Inflation Data A Labor Department report today showed the cost of living in the U.S. rose less than forecast in August, a sign it will take time for inflation to reach the Fed’s goal. Central bankers have said they are watching prices to ensure the U.S. doesn’t slip into a long period of diminishing increases, or disinflation, that damages the expansion. Microsoft Buyback Microsoft increased 0.4 percent to $32.93. The repurchase program, which has no expiration date, replaces another $40 billion buyback plan that was due to lapse at the end of this month, Redmond, Washington-based Microsoft said in a statement. The company’s dividend will rise 22 percent to 28 cents a share. Low Rates “The news today is indicative of the trend we’ve seen all year, simply because companies are taking the low rates, borrowing some money, taking the cash, putting it to work,” John Canally, investment strategist for LPL Financial LLC in Boston, said in a phone interview. He helps manage $396.7 billion. “Companies have to find a way to be more efficient with their capital. Companies have to be able to generate earnings in a world where you’re getting relatively low growth.” Homebuilders Gain An S&P 500 index of homebuilders advanced 0.4 percent. KB Home rose 0.6 percent to $17.27 and Lennar Corp. increased 0.8 percent to $35.04. The National Association of Home Builders/Wells Fargo confidence index registered 58 this month, matching August’s revised reading as the strongest since November 2005, a report from the Washington-based group showed today. Readings greater than 50 mean more builders view conditions as good than poor. US Airways Group Inc. jumped 3.6 percent to $18.72 and Delta Air Lines Inc. advanced 0.7 percent to $23.32. The two airlines were each raised to overweight from neutral at JPMorgan Chase & Co. Broadcom Corp. surged 2 percent to $27.45. The chipmaker was raised to positive from neutral by Susquehanna Financial Group analyst Christopher Caso. Mosaic, North America’s second-largest fertilizer producer, relinquished 1.2 percent to $45. Global fertilizer markets have weakened, in part, because of fertilizer distributors’ cautiousness related to the breakup of Belarusian Potash Co., Mosaic said in a statement. On July 30, OAO Uralkali, the world’s largest potash producer, quit Belarusian Potash, the largest trader of the crop nutrient, because of a dispute with its partner Belaruskali. Potash Corp. of Saskatchewan Inc. tumbled 1.7 percent to $32.45 and Agrium Inc. pulled back 1.3 percent to $90.69. Outerwall Inc., owner of the Redbox DVD kiosks, dropped 12 percent to $49.49 after cutting its third-quarter and full-year forecasts because of discounts and shorter rentals.
