Investors added more than $19 billion in new cash to U.S.-based stock and money market funds in the latest week as the second-quarter earnings season kicked off, data from Thomson Reuters' Lipper service showed on Thursday.
Investors in U.S.-based funds committed $3.7 billion to stock funds in the week ended July 9 after adding $3.1 billion to the funds the prior week. Stock mutual funds attracted $1.5 billion in new cash, while stock exchange-traded funds added $2.2 billion. Stock mutual funds are commonly purchased by retail investors, while stock ETFs are thought to represent the institutional investor.
Money market funds posted net inflows of $15.4 billion, their third straight week of inflows and their largest inflows since early May. Investors in those funds "are saying we need to wait and see what earnings season really looks like," said Tom Roseen, head of research services at Lipper.
Moving cash into money market funds could help those investors get ready to move further into stock funds if they see opportunities, such as a correction, Roseen said.
Earlier this week aluminum maker Alcoa reported adjusted second-quarter earnings that topped Wall Street's forecasts. The company, the first S&P 500 company to report results each quarter, is often seen as a bellwether for the earnings season.
The Standard & Poor's 500 index dipped 0.09 percent from its close on Wednesday, July 2, through Wednesday, July 9. That week included the July 4th holiday, when U.S. markets were closed.
"People are looking at the opportunity to buy in," Roseen said, but might be wary because "this third quarter at the very end can be a little bit sluggish as we get into the dog days of autumn."
Taxable bond funds attracted net inflows of $1.5 billion, their third straight week of inflows.
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