Further, while Saudi Arabia has used part of that cash flow to build out its infrastructure and improve public services, the Saudis, along with other oil-producing states, have expressed an interest in modernizing their economy and diversifying it so that it's not as dependent on oil revenue.

Another capital source

Economist Steve Affinito told BloggingStocks on Wednesday that although the U.S. may strengthen regulations aimed at improving sovereign wealth fund transparency, among other reforms, the Saudi announcement should be received positively by the markets.

"It's not so much the fact that it's a Saudi decision, but that it represents evidence that there's another pool of capital available for the equity markets," Affinito said. "Indeed, the Saudis may not invest any money in U.S. equities, but even if they invest somewhere else that's still a commitment to equities. That will free up capital, and it also sends a signal to the international financial community that there are large-money investors willing to commit new money. In this investment climate, that's no small development."

In the past six months, Citigroup (NYSE: C) has secured $7.5 billion from Abu Dhabi's sovereign wealth fund and $14.5 billion from the governments of Kuwait, Singapore, and Saudi billionaire Prince Alwaleed bin Talal. Also, earlier this month, Merrill Lynch (NYSE: MER) said Kuwait contributed $6.6 billion to the pool of funds it raised to rebuild capital that was lost due to subprime mortgage and related asset defaults.