Investors drain most cash from U.S. stock funds in 6 weeks: ICI
NEW YORK (Reuters) - Investors in U.S.-based mutual funds took the most cash out of stock funds in six weeks ahead of meetings in Washington, D.C. surrounding the looming "fiscal cliff" of tax hikes and spending cuts, data from the Investment Company Institute showed on Wednesday.
Stock funds had estimated net outflows of $8.38 billion in the week ended November 14, the most since early October, said ICI, a U.S. mutual fund trade organization.
The outflows indicate greater bearishness toward stocks. The previous week, investors took just $1.84 billion out of the funds, the least in 16 weeks.
Demand for bond funds was also modestly weaker than the previous week. The funds had net inflows of $6.61 billion over the reporting period, showing a dip from the prior week's inflows of $7.47 billion.
The benchmark S&P 500 .SPX stock index fell 2.8 percent over the reporting period as concerns rose as to whether U.S. President Barack Obama and Congress could reach a deal to avert the fiscal cliff of tax increases and spending cuts set to begin at the start of next year.
Obama met with top U.S. lawmakers last Friday in the first face-to-face meeting on the fiscal cliff, and the parties hope to start serious negotiations after the Thanksgiving holiday on Thursday.
The harsh sentiment toward stocks also hit hybrid funds, which can invest in stocks and fixed income securities. The funds suffered outflows of $1.22 billion, the most since early June.
(Reporting by Sam Forgione; Editing by David Gregorio)
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