Prudential's Smith Cuts S&P 2001 Target to 950
NEW YORK, Sept 20 (Reuters) -- Prudential Financial's chief investment strategist Greg Smith on Thursday said he has cut his year-end target for the Standard & Poor's 500 Index (^SPX - news) to 950 because last week's attacks have pushed the world economy into a recession.
Smith had an S&P 500 target of about 1,200 before the attacks that leveled the World Trade Center in New York's financial district, he said. Now he predicts the S&P will reach that level by year-end 2002.
``The world economy was (already) showing some signs of weakening before the September 11th tragedy,'' Smith said. Following the tragedy, ``we'll have a lot of profit disappointments. We're not likely to rebound from this by year end,'' he said.
Smith was among the most bearish of Wall Street strategists at the beginning of 2001 with a year-end target of 1,450.
A recovery in the equity markets is possible by spring, provided Washington policymakers continue to pursue their already promising monetary and fiscal response to the attacks, Smith said.
``What they've started to do on interest rates is encouraging, but they have to do more,'' he said. The U.S. Federal Reserve Bank on Monday cut interest rates for an eighth time this year by half a percentage point to 3 percent.
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