Many companies have curtailed share repurchase plans to conserve cash during the coronavirus pandemic, “removing a crucial pillar of support for the stock market as it struggles to find its footing after a record stretch of turbulence.” This according to a recent article in The Wall Street Journal.

“During bad times, you don’t do discretionary spending,” explains S&P Dow Jones Indices senior analyst Howard Silverblatt.

Share buyback programs “help boost share prices by reducing the amount of stock outstanding and lifting a company’s per-share earnings, though not its overall profit,” the article explains. It cites data from market strategist Bryan Reynolds showing that since the beginning of 2009, share buybacks have added a net $4 trillion to the stock market—compared to a net zero contribution from other sources including ETFs, insurers, mutual funds and others. Reynolds argues that the inconsistent demand for stocks resulting from curtailed buyback programs will make an already volatile market even more so: “It’s going to be like riding a bucking bronco in the stock market for the next six months.”

Silverblatt notes that the forty-three S&P 500 companies that have already suspended their buyback programs—including airlines, hotels and energy companies—represent about 25% of all the buybacks that occurred in 2019. The article notes, however, “To be sure, some of the biggest buyers of their own stock, including Apple, Inc. and other tech companies, are expected to keep their programs alive.”

The article concludes with a comment from University of Massachusetts economics professor emeritus William Lazonick, who says, “Ironically, a broad move away from buybacks and dividends would be good for companies, “ adding that those that “retain and reinvest profits, that have an incentive to build better products, they do better.”