By Tess Stynes Standard & Poor's estimated that stock buybacks by S&P-500 companies in the second quarter jumped by nearly a third compared with the first quarter of this year, led by health-products giant Johnson & Johnson JNJ +0.15% . The combined $111.7 billion in stock repurchases in the second quarter was up from $84.3 million in the prior quarter and represented growth of 2.3% from a year earlier. "The last time we have seen this level of activity was during the pre-recession heydays of 2005-2007," said Howard Silverblatt, senior index analyst at S&P Dow Jones Indices. "While the second quarter produced a 3.3% broad decline in the equity markets, companies used the quarter to increase holdings, reduce share counts, and add a tail-wind to their eps during a quarter which set an operating record for profits." For the current quarter Mr. Silverblatt expects buyback activity will improve further. "However, with average daily prices up 3% and quarter-to-date prices up over 7%, buyback dollars won't go as far as they did during the depressed second quarter," he said. Mergers and acquisitions deals in the latest quarter gave stock buybacks a boost and reduced cash and equivalents, notably J&J's $12.9 billion share repurchase as part of its deal for Synthes Inc. and Express Scripts Holding Co.'s ESRX -0.97% reducing its cash reserves by $8.2 billion in its combination with Medco Health Solutions Inc. As second-quarter buybacks go, J&J's $12.9 billion buyback is second only to International Business Machines Corp.'s IBM -0.10% $15.7 billion stock repurchase in the second quarter of 2007. Health-care companies dominated the latest quarter, with $23.8 billion in buybacks. However, excluding J&J, the sector would have had the No. 4 spot behind information technology, which has $21.6 billion in buybacks, consumer discretionary with $17.3 billion and financials at $16.2 billion.

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