NEW YORK, Feb 8 (Reuters) - The percentage of U.S. individual investors expecting a decline in stock prices has hit a three-month high, according to the American Association of Individual Investors' weekly sentiment survey.
Bearish sentiment rose 6.3 percentage points to 35 percent, putting it above the historical average of 30.5 percent for the first time in nine weeks. Conversely, bullish sentiment declined 7.7 percentage points to 37 percent, below the historical average of 38.5 percent. Investor optimism is now at a two-month low, according to the AAII survey.
Investors have been expecting greater market volatility, though the timing of this week's market drop may have caught many investors by surprise, according to the AAII.
The survey was conducted Feb. 1 to Feb. 7, concluding two days after Monday's sharp stock selloff.
Neutral sentiment, or the expectation that stock prices would stay flat, rose slightly by 1.5 percentage points to 28 percent.
The recent records in the major U.S. stock indexes, as well as tax code overhaul and U.S. Federal Reserve policy were named in the survey as significant influences on investor sentiment.
Among industries favored by AAII survey respondents, finance and technology topped the list, each garnering more than 30 percent of votes. Energy, retail and consumer discretionary were among the least popular industries, with just over a quarter of votes combined. (Reporting by April Joyner; Editing by Alden Bentley and Cynthia Osterman)