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The increasing dividend threat could undermine the stock market, which is already suffering from evidence of the looming payments squeeze and the seemingly continuous array of profit warnings.
Angus Campbell, head of market analysis at Capital Spreads, said: Any retracement is met by a wall of buyers, as demonstrated once again and even though things look decidedly patchy for the UK from an economic standpoint, those globally exposed stocks are still well placed to generate good earnings for investors and pay them back with increasing dividend payments.
Apparently, increasing dividend payments for shareholders to $3.5 billion is better for business than rewarding employees with increased pay.
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Once upon a time, managers were paid for producing increasing dividends each year.
Moreover, management has been buying back stock aggressively, increasing dividends and making small acquisitions.
"I like to see companies with a history of increasing dividends.
The Pru said that it would abandon its policy of increasing dividends above inflation.
With profits improving, financial institutions want to enrich investors by increasing dividends and buying back shares.
Mark D. Luftig, manager of the Strong Dividend Income fund, also looks for companies with a history of increasing dividends.
L&G recently reported its profits, and is confident it will maintain its policy of increasing dividends every year.
Financial stocks paced the rally after several institutions, including JPMorgan Chase, Wells Fargo and U.S. Bancorp, said they were increasing dividends.
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