Even stock market bulls are feeling a little cowed by the events in Japan – though not to the point where they are pulling in their horns.
One of the loudest voices for a stock market rally, David Bianco of Bank of America Merrill Lynch, trimmed the low end of his expected first-half trading range for the S&P 500, saying the catastrophe in Japan raises the chances U.S. companies won't hit their earnings estimates.
Bianco now expects the S&P, recently up 1.6% for the year at 1,278, to trade between 1,250 and 1,400 this year. He previously put the big-cap stock index's low point for 2011 at 1,275.
Bianco said the quake, tsunami and nuclear disaster in Japan – which so far have claimed more than 3,300 lives with more than 7,000 people missing – "has tilted the balance from upside to downside risks to our EPS outlook."
Nonetheless he held his S&P 500 earnings forecast at $95 for 2011 and $102 for 2012. And in true bull form, he trotted out 10 reasons to buy the latest dip:
He adds that his year-end forecast of S&P 1,400 – which would represent a 9.5% rise from current levels – "reflects the possibility of tail risks." Which is reassuring, because 2011 is looking like a year in which we'll be seeing more of those.
Also on Fortune.com:
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Is an even bigger stock rally ahead?
Maybe, if you believe that Wall Street analysts are a good contrary indicator – as one Wall Street analyst most definitely does.
David Bianco, the chief U.S. equity strategist at Bank of America Merrill Lynch, notes in a report Friday that sell-side analyst sentiment on stocks has dipped to its lowest level since last November.
Merrill's Sell Side Indicator, which measures how bullish the big investment MOREColin Barr - Oct 1, 2010 9:55 AM ET
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