FINANCIAL MARKETS : Stock Fund Purchases Surge, Wane

A late-summer rally in the stock market helped attract a surge of money into stock mutual funds in August. But many fund companies say the inflows dropped off in September.

The Investment Company Institute, the funds’ trade group, said Wednesday that net new cash flow into stock funds rose to $14.1 billion in August from $9.2 billion in July.

But this month, renewed market turmoil has apparently scared many investors off. Fidelity Investments said September cash flow into stock funds is about half August’s level. Vanguard Group said stock fund purchases are down about a third; Oppenheimer Management reported a 20% decline.

Net new cash flow measures fund purchases less redemptions and reinvested dividends and after adjusting for exchanges.

Many fund firms report little change in their bond business. Investors have been net sellers of bond funds since interest rates jumped last winter. The ICI said a net $2.8 billion flowed out of bond funds in August, compared to a $2.9-billion outflow in July.