UPDATE 2-Abbott Labs to repurchase $5 billion in stock

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NEW YORK, Oct 13 (Reuters) - Abbott Laboratories (ABT.N), whose shares have been near their lowest point in almost two years, on Monday said its board had authorized a new program to repurchase up to $5 billion of the company's common stock.

The buyback from the diversified health-care manufacturer follows large repurchases announced in recent weeks by Microsoft Corp (MSFT.O), Hewlett-Packard Co (HPQ.N) and Nike Inc (NKE.N).

Recent market declines stemming from the broad credit crisis have crippled valuations. Share buybacks have traditionally provided a way for companies to support share prices and show confidence in their prospects.

Abbott's share repurchase authorization has no time limit and may be discontinued at any time, the company said.

The suburban Chicago company, which reports third-quarter earnings on Wednesday, bought back more than $1 billion in stock last year and will roll about $400 million left in a previous repurchase program into the new one, spokeswoman Melissa Brotz said.

"Given Abbott's growth prospects and current market conditions, the time was right for a new, larger repurchase program," she said. "It's a significant buying opportunity."

Each major U.S. drug stock, including Abbott, hit its lowest price in at least a year on Friday as the broad market volatility claimed sectors traditionally considered to be safe havens.

Microsoft said last month it plans to buy back up to $40 billion of its own stock over the next five years, while HP plans to repurchase up to $8 billion worth of its own stock and Nike unveiled a $5 billion share buyback program.

Abbott shares rose $2.30, or 4.7 percent, to $51.75 in morning trading on the New York Stock Exchange, similar to increases of U.S. benchmark indices, which rose on optimism about a global response to the credit crisis. (Reporting by Lewis Krauskopf; Editing by Lisa Von Ahn and Maureen Bavdek)