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To: mishedlo who wrote (8257)	12/29/2000 4:44:26 PM
From: mishedlo	Respond to of 13572

Street Experts See Better Days in 2001 Interest Rate Cuts, Better Valuations Will Lead to Rally cnetinvestor.com I am glad they are bullish. Makes me feel better about my PUTs By: Adam Shell 12/29/00 9:40:40 AM Source: USA Today NEW YORK -- After the market's dismal performance this year, you'd think Wall Street seers would have soured on stocks. They haven't. Strategists from 10 of the top brokerages expect battered stocks to bounce back and post double-digit gains in 2001. On average, 10 investment pros interviewed by USA TODAY think the Standard & Poor's 500 index will rise 18% by the end of next year. Quote Snapshot JPM 170.50 -2.50 MER 67.94 -0.38 AGE 48.31 0.00 · Free Real-Time Quotes Enter symbol: · Symbol Lookup sponsored by More from CNET Investor Quotes on this page are from the time the story was published Trade Now with our broker sponsors Even considering Wall Street's propensity to be bullish, that mindset might seem surprising considering how the market is limping into 2001: * The S&P was down more than 9.2% for 2000 as of Thursday's close, its worst year since a 9.7% loss in 1981. * Down 37.1%, the Nasdaq will post its worst year since being created in 1971, barring a massive 11th-hour rally. * The Dow industrials are down 5.5%, the first annual loss since 1990. So what about 2001? UBS Warburg strategist Edward Kerschner is the biggest bull. He expects the S&P 500 to end next year at 1715, a hefty 29% above Thursday's 1334 close. Stocks should move higher, he says, because they've taken such a beating that they're selling for less than they are worth. ''The glass isn't half full, it's empty,'' says Kerschner, noting that the S&P's price-earnings ratio is almost 20% below where he says it should be. Douglas Cliggott of J.P. Morgan is the most bearish and is preaching caution. ''Be careful,'' he says. He expects a rough start for stocks and a modest recovery in the third and fourth quarters. His year-end S&P target: 1400, a 5% gain. Cliggott expects flat profit growth for the S&P 500 in 2001. That's a far cry from the 6% to 8% growth analysts expect. ''There's a lot more negative earnings news in the pipeline,'' Cliggott says. Another negative: Investors burned by the Nasdaq's 49% plunge from its high are likely to decrease their exposure to stocks, he says. But forecasting stock prices is an inexact science. Last year, most strategists got it all wrong. Most predicted gains. But the weight of six interest rate increases, the bursting of the tech-stock bubble, record high energy prices, a slowing economy and election uncertainty took stocks down hard. Year-end 2001 targets for the Dow range from 12,000, a 10% gain from 10,869 Thursday, to 13,000, a 20% jump. How will hard-hit tech stocks fare next year? Bulls such as Christine Callies, strategist at Merrill Lynch who started the year on a conservative note, expect techs to stage a recovery. ''The big driver of rising stock prices will be lower interest rates,'' she says. Merrill expects the Federal Reserve to slash short-term interest rates by at least 1 percentage point by midyear. A slowdown in tech spending, she says, is already factored into stock prices. Less exuberant strategists like A.G. Edwards' Stuart Freeman expect tech stocks to remain under pressure. ''We've had a significant shift in psychology,'' he says. ''We won't have the type of activity that will result in another frenzy.'' To see more of USAToday.com, or to subscribe, go to usatoday.com