Goldman Buyback Desk Was Flooded With Orders During Stock Rout

While hedge funds were busy bailing from stocks at a record pace as the S&P 500 plunged into a bear market, Corporate America was furiously buying.

As the benchmark index notched successive drops of more than 2.9% on Friday and Monday, Goldman Sachs Group Inc.’s unit that executes share buybacks for clients saw volume spiking to 2.8 times last year’s daily average on the first day and more than triple the average on the second. Each session ranked as the firm’s busiest of this year.

The deluge of repurchases didn’t keep the S&P 500 completing a 10% drop in just five sessions. Still, that willingness to snap up shares in times of turmoil underlines how reliable a source of support companies are in a year when many investors have taken the Federal Reserve’s hawkishness to heart and turned their backs on risky assets like stocks.

“It provides some level of comfort to know that companies are viewing the latest selloff as an opportunity to repurchase shares rather than retrenching,” said Adam Phillips, managing director of portfolio strategy at EP Wealth Advisors. “It will be interesting to see if this trend can be sustained in the second half of the year.”

The S&P 500 jumped 1.5% Wednesday after the Fed raised interest rates by the most in almost three decades, but suggested such outsize moves won’t be common as it moves to bring inflation back under control.