http://www.bloomberg.com/apps/news?pid=20601068&sid=aDiyizbdv_Rk&refer=economy U.S. Attracts Least Investment Since January 2002 (Update2) By Kevin Carmichael and William McQuillen Feb. 15 (Bloomberg) -- The U.S. attracted the least investment in December in almost five years as international investors sold stocks and Americans sent a record amount abroad. Total purchases of equities, notes and bonds fell to a net $15.6 billion, from a revised $84.9 billion in November, the Treasury Department said today in Washington. Including short- term securities, such as Treasury bills and so-called non-market trades such as stock swaps, foreigners sold a net $11 billion. The figures, which fell short of economists' forecasts, prompted the dollar to extend its decline. U.S. residents accelerated their purchases of foreign bonds as growth abroad picked up pace. Emerging-market debt in December capped its best three months in a year, JPMorgan Chase & Co. figures show. ``The weakness from the dollar perspective is the domestic outflow, probably toward emerging markets,'' said Steve Pearson, chief currency strategist at HBOS Treasury Services Plc in London. ``It reflects the popularity of these investments.'' Economists surveyed by Bloomberg News forecast a net purchase of long-term securities of $60 billion, the median of 12 forecasts, compared with the Treasury's initial estimate of $68.4 billion for November. U.S. investors bought a net $47.4 billion of overseas assets, up from $37.4 billion the month before. Americans boosted their foreign bond holdings by the most ever, while slowing their purchases of stocks. Dollar Drops The dollar fell after the release, slipping 0.2 percent against the euro to $1.3150 at 9:57 a.m. in New York. It was also down 0.7 percent versus the yen, at 119.98. The Treasury's reporting on long-term securities captures international purchases of U.S. government notes and bonds, stocks, corporate debt and securities issued by U.S. agencies such as mortgage-lenders Fannie Mae and Freddie Mac. The U.S. trade deficit was $61.2 billion in December. Some economists say the difference between the deficit and securities purchased by foreigners is an indicator of how easily the U.S. can finance its external obligations. The current-account gap, a broader measure of trade that includes investment income and transfers, widened to a record $804.9 billion in 2005. By comparison, the U.S. attracted a net $896.1 billion in purchases of long-term assets last year, up from $839.1 billion the year before. Private investors bought a net $39 billion of long-term securities in December, compared with a net $115.7 billion in November. Official purchases, mostly by central banks, increased by a net $24 billion, up from $6.5 billion the previous month. Foreigners accumulated a net $10.6 billion in Treasury notes and bonds after buying a net $34.1 billion the prior month. Agency Bonds Purchases of agency debt rose a net $28 billion, compared with a net $15.8 billion bought the previous month. International purchases of U.S. stocks fell a net $11.6 billion in December, compared with net purchases of $7 billion the previous month. Corporate bond buying was a net $36 billion, from a net $65.4 billion in November. The Fed left its benchmark rate unchanged at 5.25 percent for a fourth consecutive meeting on Dec. 12, a sign policy makers were confident inflation will slow. The Fed again left its key rate unchanged last month. China and the U.K. increased their holdings of U.S. government debt, while Caribbean-based investors sold some of their investments. Japan, the largest holder of U.S. Treasury securities, raised its holdings by $6.9 billion to $644.3 billion. China, the second-largest holder, lifted its holdings by $3.1 billion to $349.6 billion. Oil Exporters Major oil exporters -- a group that includes the 12 members of the Organization of Petroleum Exporting Countries, Ecuador, Bahrain, Oman and Gabon -- bought a net $3.8 billion of U.S. securities. The U.K., which, through London, acts as a transit point for international investors, especially those in the Middle East, added a net $16.5 billion. Caribbean banking centers, which analysts link to hedge funds, sold a net $15.1 billion. The net $11 billion in foreign sales of total U.S. securities was the biggest since June 2005, the Treasury said. Pearson said the report may not accurately capture foreigners' confidence in the U.S. because December figures are prone to ``surprises'' due to year-end bookkeeping and holidays. To contact the reporter on this story: Kevin Carmichael in Washington at kcarmichael@bloomberg.net Last Updated: February 15, 2007 10:03 EST