Companies in the S&P 500 spent $161.4 billion buying back shares in the first quarter of 2016, the second-largest amount on record, supporting stock prices amid the index's early-year drop.

Buybacks in the first quarter increased 12%, compared with the $144.1 billion spent in the first quarter of 2015, according to preliminary results from S&P Dow Jones Indices. For the 12 months ending in March 2016, S&P 500 companies spent a record $589.4 billion, beating the $589.1 billion spent in 12 months through December 2007.

The increase in buybacks comes as cash reserves for companies in the S&P 500 Industrials set a record of $1.347 trillion as of the first quarter, up 1.1% from the prior record of $1.333 trillion set at the end of 2014, said Howard Silverblatt, senior index analyst. That excludes some companies such as financial, utilities and transportation firms that are required to hold cash for various reasons.

"Companies did make good on their word," he said, noting buybacks were likely to continue to increase. "They still have the opportunity to borrow at extremely cheap rates, they have record amounts of cash on their books and they have outside pressure on them, because when activists see this cash, they want it."

Including both dividends and buybacks, total shareholder returns hit a record $257.6 billion in the first quarter of 2016, and a 12-month record of $974.6 billion for the 12 months ending in March.

Health-care companies increased their buybacks 86%, to $30.6 billion, up from $16.5 billion the prior quarter, S&P found. That was led by $8 billion from Gilead Sciences Inc.—the 18th largest buyback in the index's history.

Information technology continued to lead buybacks and cash holdings, even as the sector's percentage of the total decreased to 22% from 24% in the last quarter of 2015. Apple Inc. spent the second-most on buybacks, with $6.7 billion.

Buybacks in the energy sector posted a 21% quarterly decline, to $2.1 billion. That is down 63% from the first quarter of 2015.

Write to Aaron Kuriloff at aaron.kuriloff@wsj.com

(END) Dow Jones Newswires

June 22, 2016 15:25 ET (19:25 GMT)

Copyright (c) 2016 Dow Jones & Company, Inc.
Apple (NASDAQ:AAPL)
Historical Stock Chart
From Mar 2024 to Apr 2024 Click Here for more Apple Charts.
Apple (NASDAQ:AAPL)
Historical Stock Chart
From Apr 2023 to Apr 2024 Click Here for more Apple Charts.