ABBY SAYS BRAZIL NOT REAL THREAT
By BETH PISKORA
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Take it from Abby Joseph Cohen: Brazil is not worth worrying about.
The market strategist from Goldman Sachs said yesterday that she doesn't expect Brazil's devaluation will have much effect on U.S. corporate earnings. She also predicted another year of big gains for the S&P 500.
"We're still bullish on the U.S. stock market," she said, one week after being accused of having turned bearish when she cut the stock allocation in her model portfolio from 72 percent to 70 percent.
She maintains her year-end forecast of 9,850 for the Dow Jones industrial average, however.
The bullish forecast was enough to lift stocks out of four-day-long doldrums.
The Dow rallied 219.62 to 9,340.55 in a volatile session attributed to "double-witching," or the expiration of January stock and index options.
The S&P 500 jumped 31.07 to 1,243.26.
Stocks were buoyed by Brazil's agreement that it will not try to artificially prop up its currency. The move is seen as a way for the Brazilian economy to recover while maintaining government reserves, which would attract foreign investment.
Brazil's stock market, Latin America's largest exchange, soared more than 32 percent, after plunging the last six sessions. Its recovery boosted other world markets.
While the Brazilian real plunged 11 percent to 1.48 to the dollar, bringing its decline this year to 18 percent, Latin American stocks moved higher.
Mexico's Bolsa index jumped 7.78 percent. Britain's FTSE-100 grew 2.08 percent while Spain's Ibex index rose 3.14 percent.
The technology-laden Nasdaq composite index advanced 71.38 to 2,348.20.
Internet stocks were among the biggest winners of the day. While Cohen didn't offer a prediction for Internet stock growth, she did say that some of the valuation models used to track them "made sense."
The turnaround in the stock market ended the flight to the safe haven of U.S. bonds.
After three days of gains, the benchmark 30-year Treasury bond fell 20/32, to10210/32, raising its yield 4 basis points to 5.10 percent.
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