'Wall of Worry' Rebuilt

Investors withdrawing money from U.S. stocks and holding cash, as some industries lose the most market cap since 2008.

Investors are losing their nerve in the stock market amid selling that has sent some industries down the most since 2008. In the past, that’s been a signal to buy.

Global money managers raised cash holdings to a two-year high this month and say America is the worst place to invest, a Bank of America Corp. survey published last week shows. Investors have pulled about $10 billion from funds that buy U.S. equity this month, set for the biggest outflows since August, according to data compiled by Bloomberg and the Investment Company Institute.

The proportion of respondents citing the U.S. as the least-attractive destination for investments doubled to 18 percent in May from a month ago, Bank of America’s survey found.

Investors prefer Europe, saying their stocks are undervalued, according to the survey. The S&P 500 is trading at 16 times estimated profits, compared with the multiple of 15 for the Stoxx Europe 600 Index, data compiled by Bloomberg show.

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