Some fund managers had to pull money for nervous nellies who were cashing out. They are gone. Therefore, fund managers are taking cash and selecting stocks that are looking like bargains.
Also, private investors may have pulled money out, but where are they going to put it...in BANKS? Heck, right now I would be worried about having my money in Citibank, plus they pay really low interest.
I would guess a lot of people pulled their money out, looked around, and decided to go back into the market instead.
Comments about CITI aside, I've been in cash a Treasuries for 2 years. Not much return but beats a decline.