The stock market broke its losing streak in a big way today.
Getty Images The S&P 500 gained 0.8% to 1,998.30, while the Dow Jones Industrial Average rose 154.19 points, or 0.9%, to 17,210.06. The Nasdaq Composite advanced 1% to 4,555.22 and the small-company Russell 2000 finished up 0.9% at 1,128.37.
Chalk up the gains to better-than-forecast new home sales and the desire of investors to, you know, buy the dips.
The folks at Birinyi Associates remain upbeat about the market and think the S&P 500 could hit 2,100 by the end of the year:
We will continue positive because history suggests higher prices and the negative case continues to be, as the kids say, "sketchy." While the market, we are told, is expensive we might first point out that its multiple is lower than it was five years ago. Some stocks – obviously not all – are actually cheaper than they were six months ago. Apple (AAPL), for example is trading at 16 times earnings vs 22x five years ago.
Barclays’ Jonathan Glionna and team don’t expect the S&P 500 to hit 2,100 until the end of 2015:
We are also somewhat critical about the quality of EPS growth from US corporates…as the benefits of margin expansion and share repurchases look priced in and a return of faster revenue growth becomes a prerequisite for another re-rating higher. However, sales growth is currently only at 3%. Therefore US equity markets may have entered a period of lower returns.
This is not to say we are bearish on the prospects of US stock markets. M&A activity remains robust, and the outperformance of acquirers…suggests that the cycle will last longer than usual. This should remain supportive of US stock markets. Our S&P 500 targets of 1975 for 2014 and 2100 for 2015 suggest modest upside.
And that’s what counts as bearish on Wall Street these days.
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