Wall Street strategists expect stocks to perform better this year than in 2011.
A Birinyi Associates survey of strategists at 13 top Wall Street firms produced an average forecast of a 6.1 percent gain for the Standard & Poor’s 500 Index – to 1,334, The Wall Street Journal reports.
The S&P 500 ended 2011 at 1,258, unchanged for the year.
The forecasts range from Binky Chadha of Deutsche Bank, who expects a 19 percent gain to 1,500, to Adam Parker of Morgan Stanley, who predicts a drop of 7 percent to 1,167.
Thursday, the S&P climbed 0.3 percent to 1,281.06 and is up about 1.8 percent this year.
Last year, the survey produced an average estimate of an 8.3 percent gain for 2011. Obviously that turned out to be overly optimistic.
Parker was the most accurate of the 11 strategists for whom a 2011 forecast was available. He expects stocks to slide this year thanks to tepid global economic growth.
In addition, recent profit reports from Intel and Oracle point to a weak corporate earnings season, he tells The Journal. And future earnings may be hurt by the dollar’s recent rise against the euro.
"We think the risk reward is skewed to the negative," Parker says.
Weak earnings news from several major companies hurt stocks Thursday.
“The disappointing earnings forecast can weigh down on stocks,” Stanley Nabi, vice chairman of Silvercrest Asset Management Group, tells Bloomberg.
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