Stock Optimism Drops for 2nd Straight Month

Fund managers and other institutional investors are less confident than they were last month, the second consecutive drop in optimism about stocks, according to an index compiled by State Street Associates.

The State Street investor confidence index fell 3.7 points to 94.9 this month from a revised 98.6 in January, the Boston- based company said in a statement. The index measures investors’ willingness to take risks by tracking their stock-buying patterns.

After rising to a 12-month high in December, the index has declined as some investors shifted to less-risky securities for the last two months, said Ken Froot, a Harvard University professor and senior partner at State Street Associates.

The index shows “investors moving to protect their recent gains in risky securities,” he said.

The decrease in confidence came even as stocks have rallied further. The Standard & Poor’s 500 index has gained 2.3% this month after rising 1.7% in January. It surged 26% last year after a three-year bear market.

The index for January was revised downward to 98.6 from a preliminary 105.9.