Amid the worst start for stocks ever, one long-time buyer isstanding firm: U.S. companies. Whether that's reason for optimismis debatable.

American corporations repurchased more of their own shares inthe first four weeks of the year than they did in the same periodof 2015, according to Bank of America Corp. Goldman Sachs GroupInc. told clients this week that buybacks are accounting for nearly20 percent of trading volume, according to two people who saw thenote.

The data is subject to differing interpretations. While bullswill be glad to learn companies remain a reliable source of demandduring one of the most volatile stretches in seven years, they maybe less happy with the results. Almost $3 trillion has been erasedfrom American equity prices in 2016 as concerns ranging from Chinato the Federal Reserve spurred one of the broadest retreats fromrisk since the financial crisis.

“It's now much harder to get a lot of use out of buybacks,” saidBenjamin Dunn, president of Alpha Theory Advisors, which works withhedge funds overseeing about $6 billion. “It's a littledisconcerting. Multiples have fallen this year and you have to buyback a lot of stock just for prices to stay in place.”

Buybacks increased amid a selloff that has sent anequal-weighted version of the Standard & Poor's 500 Index lowerby 9.3 percent since New Year's. An S&P index, alsoequal-weighted, that compiles the companies buying back the mostshares is down 11 percent. While companies customarily suspenddiscretionary buybacks during the five weeks before they reportquarterly results, scheduled programs can still continue during theperiod.

Corporations have been one of the biggest sources of fresh cashfor equities, churning out more than $2 trillion throughrepurchases, data from S&P Dow Jones Indices show. Through Dec.21, last year was on pace to be the biggest year of buybacks since2007, according to S&P.

It's not the first time corporate buying has occurred as themarket teetered. A Goldman Sachs unit recorded its busiest daysince 2011 in August as the S&P 500 dipped. Companies today maybe enticed to buy stock as shares cheapen from their bull markethighs. At 16.8 times annual earnings, the S&P 500 now tradesclose to its 16.6 average over the last decade.

“Management teams in America have been in the pro-buyback modefor several years, and they look for any opportunity to buy backstock,” Paul Karos, head of equity at $3.5 billion WhiteboxAdvisors LLC in Minneapolis, Minn., said by phone. “It's areflection of cash on corporate balance sheets that they're notusing on organic cap-ex investments. Whether that will be good orbad, we don't know.”

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