Investor Sentiment Index Declines in Early May

U.S. investors turned more gloomy this month about financial markets -- or at least they had before the recent rally in stocks.

Brokerage UBS said its investor sentiment index fell to a two-year low this month. The firm said high gasoline prices were a key worry.

“Energy prices are really beginning to impact the investor’s thinking,” said Anne Briglia, a strategist at UBS Wealth Management in New York.

The sentiment index, calculated by UBS and the Gallup Organization based on about 800 investors’ responses to questions about the economy and markets, slid to 50 from 52 in April. It was the lowest index reading since 42 in May 2003.

But since the survey was conducted May 1 to 15, gasoline prices have fallen further, and the Standard & Poor’s 500 stock index has rebounded 3.5%, cutting its year-to-date loss to 1.5%.

Investors still have relatively high expectations for financial returns over the next year: On average they expect to earn 9.1% on their portfolios, although that is down from an average of 11.4% expected in January.