The Dow Jones Industrial Average (DJINDICES:^DJI) was struggling to pick a direction on Wednesday, fluctuating between gains and losses throughout the morning. By 12:10 p.m. EDT, the Dow was down about 0.1%.

The economic backdrop remains uncertain, with the U.S. economy reopening as cases of COVID-19 surge in some states. The economic recovery could hit a roadblock if people pull back on activity due to a resurgent virus, with or without new stay-at-home orders.

Shares of both Apple (NASDAQ:AAPL) and Microsoft (NASDAQ:MSFT) managed to gain on Wednesday. Apple stock got a price target boost from an analyst optimistic about macroeconomic improvements and the company's share buyback program, and Microsoft confirmed that it was not yet reopening any of its retail stores.

A Wall Street street sign.

Image source: Getty Images.

Apple's buybacks in the spotlight

Apple buys back a lot of its own stock. In the six months that ended in March, it poured more than $39 billion into share buybacks. The company is slowly whittling down the excess cash on its balance sheet, built up thanks to the massive success of the iPhone since it was launched back in 2007.

Apple's buyback activity has caught the attention of RBC analyst Robert Muller. He boosted his price target on Apple stock from $345 to $390 on Wednesday, citing improving macroeconomic conditions and the company's share buyback program. Muller doesn't believe investors are fully pricing in Apple's capital return policy.

The scenario laid out by Muller sees Apple spending around $70 billion annually on share buybacks over the next decade while growing revenue by 3% to 4% each year. That would bring Apple's total cash and investments down to match its total debt, making the company cash neutral.

Whether Apple can grow consistently over the next decade is unclear. The iPhone isn't much of a growth business anymore, and there's likely a much lower ceiling for popular products like the Apple Watch and AirPods compared with the iPhone. Apple's services business could be a growth engine, but the company still hasn't quite figured out the streaming business.

Apple will almost certainly continue to pour tens of billions of dollars each year into share buybacks, but that may not be enough to propel the stock higher in the long run if revenue growth falls short of expectations. The stock was up 0.8% by early Wednesday afternoon.

Microsoft to keep stores closed

Like Apple, Microsoft operates a fleet of retail stores that sell the company's various hardware products. Microsoft's products, which include Surface laptops, tablets, and headphones, don't carry quite the same cachet as Apple products. And Microsoft's retail business isn't nearly as big. Apple operates over 500 stores globally, including around 270 in the U.S, compared with roughly 100 for Microsoft.

But Microsoft's stores still play an important role in introducing consumers to its products, and the closing of those stores due to the pandemic likely hurt sales. While Apple has been gradually reopening its stores, Microsoft is taking a more measured approach.

In an email statement provided to the technology news website The Verge, Microsoft said that its stores will remain closed until further notice. The tech giant said that it is prioritizing health and safety, and that it has no new updates on store reopenings at this time.

Microsoft is primarily a software company, so retail stores aren't nearly as important for generating revenue as they are for Apple. In Microsoft's latest quarter, total revenue surged 15% on cloud computing strength, while revenue from Surface products rose just 1%. That sluggish Surface growth wasn't nearly enough to derail a solid quarter.

Shares of Microsoft were up about 0.8% by early Wednesday afternoon. The stock is just slightly below its 52-week high.

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