(April 24) – “The bulls have not yet surrendered,” writes Danny Hakim in today’s New York Times.

“Yes, March was one of the biggest months for withdrawals from stock mutual funds since October 1987. But investors have been becoming aggressive again in April, piling back into growth-stock funds and turning away from bonds and cash.”

“From April 5 to April 18, investors put $5.2 billion more into stock funds than they took out and started pulling money out of bond funds, according to AMG Data Services, which tracks money flows in the mutual fund industry. And after record flows into money market funds in the first quarter, investors have started taking money out in April.”

“That individual investors are in such a forgiving mood despite generally gloomy earnings reports is a troubling sign to many fund managers and analysts that the stock market has not yet reached bottom.”

“Last month, investors pulled out $9.7 billion to $19 billion more than they put into stock funds, depending on which estimate from three firms that track money flows is used. Two of the projections, by Lipper and Strategic Insight, put the net withdrawal above the record $11.6 billion outflow in August 1998, when the Russian and Asian financial crises led to a flight from stocks.”

“By percentages, however, the March withdrawals were modest compared with the withdrawals ignited by the precipitous market drop in October 1987. Many fund analysts have been surprised that in the first quarter, over all, more money has been invested in stock funds than has been taken out because a strong January more than made up for net withdrawals in February and March. And in April, at the first sign of a rally, investors started reversing course.”

” ‘If there’s anything these numbers tell us, it’s that mutual fund investors did not come close to capitulation,’ said Robert Adler, president of AMG.”

“Wall Street appears wary that the last few weeks have been a so-called sucker’s rally, a bear market phenomenon that comes before further declines.”