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UPDATE 1-U.S.-based stock funds take in most cash since May -Lipper

(Adds data on mutual funds and ETFs, investor quote, table, byline) NEW YORK, Nov 2 (Reuters) - Reluctant investors warmed to stocks in October, stockpiling $19.3 billion in U.S.-based equity funds, marking the first month of positive inflows for the funds since May, when they took in $31.8 billion, Lipper data showed on Thursday. The massive inflows come as third-quarter earnings seem to validate the strong market gains for stocks this year, with earnings estimated to have risen 7.7 percent over the year prior, according to Thomson Reuters I/B/E/S. The S&P 500 is up 17 percent this year, including dividends. For their part, money market funds, where investors park cash, recorded withdrawals of $21.3 billion in the latest week ended Wednesday, as investors put money to work in equities. Some investors still expressed concern that traders are chasing lofty markets. But Garth Nisbet, a senior portfolio manager at Wells Fargo & Co's asset management unit, said the economy is thriving and that there is more upside to come. "There's two things that destroy wealth: market timing and bearishness," he said, referring to market skeptics. "This is a fairly market-friendly environment." U.S.-based stock mutual funds and exchange-traded funds (ETFs) pulled in $3.6 billion during their fourth straight week of inflows. Domestic stock fund inflows of $2.2 billion for the week were the largest since August, according to Lipper. Nisbet said it is possible that technology stocks are due for a pullback following "aggressive" gains, led by Amazon.com Inc, and that rising U.S. wages may chip away at corporate profits. Bond funds, popular for most of this year, saw their appeal fade a bit. Taxable-bond funds took in their 17th straight week of inflows, but just $678 million, down from the nearly $3 billion-a-week average this year. High-yield bond funds posted $1.2 billion in withdrawals, the most since August this year. Treasury fund outflows of $887 million were the largest since August 2016. Among developed markets outside the United States, investors favored Japan over Europe. Japanese stock inflows were the largest since February at $501 million, while European equity funds outflows of $404 million were the largest since September, according to Thomson Reuters' Lipper unit. The following is a breakdown of the flows for the week, including mutual funds and ETFs:

Sector Flow Chg % Assets Assets Count ($blns) ($blns) All Equity Funds 3.598 0.06 6,296.851 12,127 Domestic Equities 2.238 0.05 4,221.592 8,647 Non-Domestic Equities 1.360 0.07 2,075.259 3,480 All Taxable Bond Funds 0.678 0.03 2,599.764 6,052 All Money Market Funds -21.297 -0.82 2,571.202 1,056 All Municipal Bond Funds -0.655 -0.16 399.292 1,469

(Reporting by Trevor Hunnicutt; Editing by Jennifer Ablan)