Investors in 401(k)s "appear to be encouraged by the improving stock market during the second quarter," said Jim McCool, senior vice president for Charles Schwab Investor Services, which reviews investor activity for self-directed 401(k) participants. "We saw renewed interest in individual equities, reflected by a 9% increase in asset flows. Overall trading activity increased as well, reaching its highest level since the first quarter of 2002."

The Hewitt 401(k) Index, which tracks the daily transfer activity of nearly 1.5 million employees, reports similar good news. Employees with stock investments reached 61.7%, a 5.1% increase over levels posted in February. Further, since March, investors transferred more than $1.2 billion in assets out of stable value and bond funds into stock investments.

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