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INVESTORS KEEP FEEDING STOCK FUNDS

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With the Dow Jones industrial average leaping to one new high after another in the first half of this month, investors continued to pour money into stock mutual funds at an unprecedented rate, according to data gathered for Money magazine's Small Investor Index.

During the first two weeks of February, investors flooded stock funds with $12.2 billion in new deposits, according to AMG Data Services in Arcata, Calif. At that pace, net fund sales for February will nearly equal last month's record of $24.7 billion.For example, at the Vanguard group, which manages $192 billion in assets, stock funds have attracted $1.5 billion in the first half of February, after taking in an all-time high of $2.3 billion last month. Stock funds at T. Rowe Price ($52 billion in assets) drew $550 million through Feb. 14 after record inflows of $1.3 billion in January.

The cash streaming in from mutual fund investors has played a key role in the stock market's 5.8 percent advance this year. And according to Art Michelletti, chief economist at Bailard Biehl & Kaiser, a San Francisco investment advisory firm, there is no sign of a letup. He said much of the money is coming from tax-deferred company savings plans such as 401 .

"In addition, a lot of money is still sitting on the sidelines in money-market funds and CDs," he said. "With interest rates likely to go lower, investors seeking higher returns will look to the stock market."

Last week, the Money Index, which tracks the typical investor's holdings, fell $83 to $58,943. Stocks lost $110, and bonds returned $16. CDs and money funds added $12, while gold dipped $4.