LIVE MARKETS-AAII survey shows investor gloom deepening

Individual investors grew more pessimistic about the U.S. stock market's near-term outlook in the latest American Association of Individual Investors (AAII) Sentiment Survey, with bearish sentiment rising while both bullish and neutral views weakened.

The share of respondents expecting stock prices to fall over the next six months climbed 4.5 percentage points to 44.4%. Bearish sentiment is unusually high and has stayed above its historical average of 31.0% for the 29th straight week.

Meanwhile, neutral sentiment, or expectations that stocks will be little changed over the next six months, fell 2 percentage points to 22.6%. The decline pushed the reading into unusually low territory, well below its long-term average of 31.4%, and marked the 110th time in the past 112 weeks that neutral sentiment has been below its historical norm.

Bullish sentiment also edged lower. The percentage of investors expecting stocks to rise over the next six months dipped 2.6 percentage points to 32.9%, staying below its historical average of 37.6% for the eighth time in the past nine weeks.

The shift left the AAII bull-bear spread, a closely watched gauge of investor sentiment, even more negative. The spread fell to negative 11.5% from negative 4.4% a week earlier, moving further below its long-term average of 6.2%. The measure has now been below its long-term norm in eight of the past nine weeks.

Taken together, the latest survey suggests individual investors are growing more cautious about the market outlook, despite major U.S. stock indexes hovering near record highs.