Wall Street Has High Hopes for 2001
Dec. 29 -- There’s no denying that 2000 has been a real bummer for the stock market.
The year 2000 will long be remembered for its seemingly unstoppable gains followed by equally impressive losses. This year through mid-December, the S&P 500 Index is down 10.7 percent. The Dow Jones Industrial Average is behind 9.2 percent, while the Nasdaq Composite Index is off a whopping 34.8 percent.
But if stock market strategists are to be believed, Wall Street may be poised to post a bit of a comeback during 2001.
Making PredictionsAbout this time of year, market gurus start to take a long gaze into their crystal balls to see what lies ahead. Believe it or not, many of them remain confident that significant stock gains are not a thing of the past, despite the wild-and-woolly ride the market has taken over the past 12 months.
In the face of 2000’s dreck, experts still think the opportunity for intelligent investment in the stock market exists. A poll of top market strategists — from the staunchest bulls to the strictest bears — shows that, on average, the professionals predict the S&P 500 will hit 1626 by the end of 2001.
“We’re ending a chapter of subnormal returns,” said Charlie Reinhard, senior strategist at Lehman Brothers. “And we’re opening a period where the market is going to perform much better.” Reinhard thinks the S&P is 13 percent undervalued and forecasts that it will touch 1675 — one of the more bullish targets on the Street — by the end of 2001. The 1675 figure was trimmed within the past week from a previous 1800 forecast.
By all means, predicting the future is tricky business, particularly in today’s volatile climate.
“We had a fabulous 1999 and a disappointing 2000,” said Arthur Hogan, chief market analyst at Jefferies & Co. “Day traders, who lost their shirts over the past year, have learned a valuable lesson.” Safe money says they’ll work hard not to repeat their mistakes.
