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In a sign of either confidence or stupidity, April could be the first month this year in which equity funds see a net inflow of money, as the now-stalled war rally apparently coaxed retail investors back to stocks.

Average cash inflows into stock funds in the week ended April 9 rose to $2.5 billion, according to estimates by Trim Tabs, a market research firm in California. At this rate, the month is expected to total a $7.2 billion inflow. Bond funds, in contrast, attracted less money in the same week in April: $1.7 billion, after a $2.4 billion inflow the week before.

It's an early indication that money might finally be coming off the sidelines, where it has been parked since November 2002, the last month with average inflows into equity funds.

"The public was scared of war, and now that it's out of the way, they're confident again," said Carl Wittnebert, director of research at Trim Tabs. "But it may take better news on corporate profits for this movement to go forward."

The trend had been picking up steam ever since the U.S. launched its attack on Iraq. After having faced total outflows of almost $20 billion since the start of the year, stock funds got a $1.3 billion boost in the first week of war. That move was followed by an even greater inflow of $1.6 billion the following week, despite setbacks for coalition forces involving casualties and prisoners of war.

With the conclusion of war in Iraq seeming near, more of the uncertainty hanging over the markets was lifted, and this is drawing investors back into equities and out of the relative safety of bonds, experts said. While they interpret this as a positive signal from the markets, many ask how much staying power it has.

"I don't know if it's sustainable. We were tipped off with GE's results on what to expect in the new earnings season," said Daniel Morgan, fund manager at Noble Financial Group in Florida. Morgan is not expecting a big turnaround in corporate reports. "It will be spotty, and mutual fund investors, which tend to be fickle, may say the heck with it."

Morgan was referring to

General Electric's

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results, which met analysts' forecasts. The world's second-largest company by market value, it said earnings rose to $3.0 billion, or 30 cents a share, from $2.5 billion, or 25 cents a share in the year-ago period. The company also said it is comfortable with estimates for the rest of the year.

For now, the outlook remains fairly grim. Earnings for companies in the

S&P 500

are expected to grow 8.3% in first-quarter results, compared with a 9.7% increase in the fourth quarter of last year. Excluding gains in the energy sector, profits are expected to edge up a modest 1.6%. In terms of guidance, for every company forecasting it will beat estimates, 2.9 have warned they will fall short.

If earnings succeed in squelching the current inflow of capital into funds, asset management firms would continue facing trouble. In a sign of the times,

T. Rowe Price

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said Thursday that it expects its first-quarter earnings to fall about 30% below year-earlier results.