WASHINGTON -- Foreign investors had a strong appetite for Treasury securities and U.S. corporate bonds in the second quarter, the Commerce Department said yesterday.

Net foreign purchases of Treasury bonds adn other securities soared to $13.9 billion, from $3.4 billion in the first quarter, according to the department's report on the U.S. current account balance. The increase reflected large purchases of marketable bonds sold by international investment funds, officials said.

Net foreign purchases of non-Treasury securities jumped to $15.3 billion, from $5.3 billion in the first quarter, with solid gains both for stocks adn bonds. Bond purchases totaled $7.4 billion, more than double the $3.8 billion total recorded in the first quarter.

Commerce officials said the upswing in nongovernment bond sales was largely in corporate issues and reflected a strong dollar, which appreaciated 10% on a trade-weighted basis against the currencies of 10 major industrial countries. The drop in U.S. interest rates also spurred corporations to step up issues, officials said.

U.S. investors poured a record $13.2 billion into foreign securities in the second quarter, according to the Commerce Department report. Net U.S. purchases of foreign stocks totaled $9.2 billion, and bond purchases totaled $4.1 billion. New issues of foreign bonds in the United States were especially strong, reflecting lower interest rates compared with rates abroad, officials said.

David Strongin, director of international finance for the Securities Industry Association, called the rise in foreign purchases of U.S. stocks and bonds "an encouraging trend," especially given concerns that Japanese and German investors have been channeling more capital into their own domestic markets. Still, he added, the United States cannot expect a return to the booming 1980s, when foreign savers poured money into U.S. financial markets.

The current account report measures U.S. trade in goods and services, as well as investment income and unilateral government payments. Over all, the United States recorded a trade surplus of $3.0 billion in the second quarter following a revised surplus of $10.5 billion in the first quarter.

The figures reflected $34.3 billion in cash payments by U.S. allies for the Persian Gulf was during the first half of the year, officials said. Excluding unilateral transfers, the United States had a deficit of $5.2 billion in the second quarter, down from $6.4 billion in the first quarter.

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