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I see 2012 as a challenging year in the economy and stock market once again, but together, we can navigate through the data, and create strategies that have a high probability of being successful, however, the problems in the Euro Zone could trump many financial strategies.

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 on 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.

Repurchases are attractive options now for companies to put their cash reserves to work.

“Companies are awash with cash,” S&P analyst Howard Silverblatt said, with reserves among companies in the S&P 500 at about $1 trillion, a record.

Companies have recently been using buybacks to prevent dilution to the value of existing shares resulting from stock options issued through employee compensation programs.

But Silverblatt says the stepped-up buyback activity has now reached the point where it could significantly boost some companies’ per-share earnings when fourth-quarter results are announced starting next month.

Nearly one-fifth of the S&P 500 companies now have at least 4 percent fewer shares outstanding than they had at the same point a year ago. That will translate into a 4 percent increase in earnings per share, relative to those companies’ earnings in dollar terms.

“And it’s earnings per share that drives the market,” Silverblatt said.

Wall Street analysts typically measure whether a company’s earnings met expectations based on per-share results, rather than earnings in dollar terms.

With lower share counts lifting per-share results, Silverblatt hopes those numbers don’t become a substitute for actual earnings growth.

Investors, he said, “need to review the share change, and the impact on EPS, or risk overpaying for the stock.”

Many companies are in good position to buy back shares because they’ve been building up cash reserves exiting the Great Recession, which officially ended in mid-2009.

In the third quarter, shares became less expensive for companies to repurchase as stock prices became depressed. Fears about the European debt crisis and slowing U.S. economic growth sent markets down.

In the latest quarter, information technology companies continued to be the most aggressive at buying back stock. The sector’s $23.61 billion total accounted for nearly 20 percent of all buybacks, down from info tech’s 22 percent in the second quarter. Intel Corp. was the most active info tech company in the latest quarter, buying back $4.01 billion worth of shares, followed by IBM Corp. with $3.44 billion.

Among all companies, the biggest was Exxon Mobil Corp. with $5.47 billion in third-quarter buybacks, matching the energy company’s second quarter total. The second-biggest last quarter was JPMorgan Chase & Co. The bank repurchased $4.43 billion, up from $3.5 billion in the second quarter.

Companies that produce consumer staples like food and household products posted the largest increase in buyback activity among market sectors in the latest quarter, with $14.65 billion for the quarter, up from $11.54 billion in the second quarter.

For the fourth quarter, Silverblatt expects buybacks to continue growing to more than $120 billion.

By Mark Jewell, AP Business Writer | AP

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Lagarde said that if countries don’t work together, the world will face a situation similar to the 1930s, before the world slid into World War II.

“There is no economy in the world, whether low-income countries, emerging markets, middle-income countries or super- advanced economies that will be immune to the crisis that we see not only unfolding, but escalating at a point where everybody would actually have to focus on what it can do,” Lagarde said.

If the international community doesn’t work together, “the risk from an economic point of view is that of retraction, rising protectionism, isolation,” Lagarde said. “This is exactly the description of what happened in the ‘30s and what followed is not something we are looking forward to.”

Lagarde said the world economic outlook “is quite gloomy” with pervasive downside risk, downward revisions, slower growth than expected, higher deficits than predicted and public finances in shaky condition. “And that is pretty much true the world over,” Lagarde said.

The one exception, she said, is emerging markets and the Asian economies most badly hit during the 1990s economic crisis. They, too, will have to help manage the current crisis if the world is to weather the risk, she said. Leadership has to rest with Europe, she said.

Crisis Core

“It’s going to have to start from the core of the crisis at the moment, which is obviously the European countries and in particular the countries of the eurozone, which are sharing this monetary union,” Lagarde said.

She described the eurozone, the countries that use the euro, as a “monetary union which has not been properly been completed by an economic and fiscal union, which is currently in the works.”

As Europe’s leaders work to resolve their “monumental” challenges, the impatience of financial markets is a problem, she said.

“It would be lovely from a market perspective if it was not just ‘currently’ but immediately, a signed, sealed, delivered done-deal overnight,” Lagarde said. “Unfortunately, those of you who have the privilege of belonging to democracies know things do not happen in that way, things take time.”

‘Fiscal Solidarity’

Lagarde said international support would probably be channeled through the IMF for “organizing a collective financial responsibility, a fiscal solidarity and that element of risk-sharing that is expected, pretty much, around the globe.”

Lagarde spoke at the State Department, where Secretary of State Hillary Clinton had invited her to address an event to promote greater involvement of women in public policy.

The leadership skills that are needed to face this crisis are ones that management consultants such as McKinsey & Co Inc. have found women possess in abundance, Lagarde said.

“Because it’s a question of courage or actually facing the issues, not being in denial, accepting the truth, accepting the reality and then dealing with it,” Lagarde said. “And frankly, from my previous life either in the private sector, or as minister of finance, or in my current position, it’s a set of skills that women excel at.”

To contact the reporter on this story: Nicole Gaouette in Washington at ngaouette@bloomberg.net

The central bank characterized the economy as expanding moderately despite an apparent slowing in global growth, and said that while there had been “some” improvement in the job market, unemployment remained elevated and housing depressed.

“Strains in global financial markets continue to pose significant downside risks to the economic outlook,” the Fed said, alluding in a post-meeting statement to pressures stemming from the debt crisis in the euro zone.

Prices for U.S. stocks and government debt pared gains, while the dollar rose against the euro after the announcement.

The Fed’s statement issued after a one-day meeting was little changed from the announcement it released after its last gathering in early November, and it only touched lightly on apparent improvements in the economy’s performance.

“They are certainly ready to lean against the wind should the economy falter,” said Cary Leahey, managing director at Decision Economics in New York.

EVANS DISSENTS AGAIN

The Fed offered no new guidance on its evolving communications policy, and repeated that it expects inflation to settle at levels at or below those consistent with its price stability mandate.

For a second time running, Chicago Fed President Charles Evans dissented against holding policy steady, saying he favored additional easing now.

The U.S. central bank has held overnight interest rates near zero since December 2008 and has bought $2.3 trillion in government and mortgage-related bonds in a further attempt to stimulate a robust recovery.

Fed officials are divided among those who think high unemployment and sluggish growth demand more action and those who view the central bank’s already-aggressive efforts as bordering dangerously on an invitation to inflation.

Some influential policymakers, including Vice Chair Janet Yellen, have suggested they would be inclined to take additional steps if growth fails to pick up.

Recent data about the U.S. economy do point to some improvement. The jobless rate tumbled 0.4 percentage point to 8.6 percent in November, factory activity has quickened and businesses are restocking depleted shelves.

Consumer spending also appears reasonably solid, although a softer-than-expected report on November retail sales on Tuesday offered a hint that it could be flagging.

The U.S. economy expanded at a 2.0 percent annual rate in the third quarter, a welcome acceleration from a sub-1 percent pace over the first half of the year. Forecasters hope growth will top a 3 percent rate in the current quarter.

However, analysts say the recovery’s current strength is partly a snapback from the weakness that followed Japan’s natural disasters and high oil prices early in the year.

They caution that a return to more-sluggish growth is likely, particularly with a recession brewing in Europe.

Many observers believe the Fed will step in to take steps to stimulate growth in 2012, first through communications measures that drive home their expectation that interest rates will not rise for along time, and then through more bond buying.

Yellen has said the Fed could reinforce its ultra-accommodative monetary stance by publishing policymakers’ forecasts for the path of interest rates. Officials are also debating whether to adopt an explicit target for inflation.

The first step would reassure skittish markets that the Fed is not about to tighten policy any time soon. The latter would aim to dispel any doubts about the central bank’s commitment to keeping inflation low.

Top officials have also remained open to adding bonds to the Fed’s already bloated portfolio.

Some have said the central bank should resume purchases of mortgage-backed securities to help revive the depressed housing market; others would prefer to stick with purchases of U.S. government debt.

By Mark Felsenthal and Pedro da Costa

(Additional reporting by David Lawder; Editing by Andrea Ricci and Tim Ahmann)

Jim will pick one business in the Dallas/Ft. Worth area and in Mpls/St. Paul, who is currently hiring, and give them Free publicity during his radio show and on his website for One month.

Jim’s show currently is on the air every Saturday morning from 9am-10am CST in the Dallas/Ft. Worth area on KVCE 1160 AM, KVCEradio.com.

Starting January 7th, 2012, Jim’s show will also air on Saturday from 12pm-1pm CST on KYCR 1570 AM in Mpls/St.Paul, business1570.com, and will replay on KYCR every Sunday from 2pm-3pm.

All of Jim’s radio shows can be heard on the Internet live via streaming audio or you can listen to previous shows by visiting, JimWigen.com and looking on the left side of the home page under Podcasts.  A description of each show allows you to target specific topics you are interested in and hear how Jim answered that particular topic.

In addition, Jim is always looking to have business owners on his show as a guest to tell their story on how they started their business and grew their business.  This is Jim’s way to inspire people to become business owners and to bring awareness to businesses who are out there trying to grow by increasing their employee headcount.

Small businesses are the growth engine in the U.S. so lets all work together on helping people start their own business and find valuable employees to grow their business, rather than rely on the U.S. Government for help.