S&P’s Stovall: Stocks May Not Stop for Correction

Thursday, 29 Mar 2012 01:54 PM

By Dan Weil

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The stock market’s tear in recent months has prompted many investment gurus to call for a correction. But one may not be coming soon, says Sam Stovall, chief equity strategist at S&P Capital IQ.

The Standard & Poor’s 500 Index has jumped 12 percent so far this quarter to 1,411, putting it on pace for the best first quarter in 14 years. So it’s only natural to expect some selling after that.

But in the prior eight times when the S&P 500 surged more than 10 percent in the first quarter, the index has averaged a 3.3 percent gain in the following quarter, Stovall tells The Wall Street Journal. The index gained during the second quarter in six of those eight previous occasions.

The S&P 500 soared 11 percent in the fourth quarter of 2011. Only once before has the S&P 500 gained more than 10 percent in both the fourth quarter and the following first quarter, as it is poised to do now.

And when that happened, the index increased 5 percent in the second quarter, Stovall says. So investors better not count on a major correction soon, he says.

Some other experts are bullish on stocks too.

“As long as the economy continues to improve, the market will continue to go up, and that’s what has happened,” Bryant Evans, a portfolio manager at Cozad Asset Management, tells Reuters.



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