(Reuters) - Investors in funds worldwide poured $11 billion into U.S. stock funds in the latest week, the most since September 2011, as the Dow Jones industrial average .DJI flirted with the psychologically important 14,000 level, data from EPFR Global showed on Friday.
Both mutual funds and exchange-traded funds that hold U.S. stocksrecorded strong inflows in the week ended January 30. U.S. stock ETFs attracted $9.6 billion of the inflows, while U.S. stock mutual funds raked in $1.4 billion, the fund-tracking firm said. The inflows accounted for much of the $18.76 billion that flowed into stock funds worldwide.
The solid demand for stock funds last month was a sharp contrast from 2012. Investors have given $53.8 billion to stock funds worldwide in the past four weeks after having pulled $69.1 billion from the funds last year.
Sentiment toward stocks has improved dramatically on signs of an upswing in the U.S. economy. Solid corporate earnings from bellwether companies such as Procter & Gamble (PG.N) and Honeywell International (HON.N) and encouraging labor-market and factory data lifted market confidence. In addition, investors were relieved after U.S. lawmakers delayed talks on raising the debt ceiling until May.
What's more, stocks are also more attractive as an alternative to middling yields on corporate and government bonds, and the inflows to stock funds could signal a rotation out of bonds.
"Clearly, equities have been on the rise," said Omer Esiner, chief market analyst at Commonwealth Foreign Exchange in Washington. He noted, however, that inflows to stock funds could also be nearing a top if investors turn more bearish.