Tags: Paulsen | S&P | 500 | 1500

Jim Paulsen: S&P 500 Can Reach 1,500 on Economic Rebound in US

By Dan Weil   |   Wednesday, 10 Oct 2012 08:43 AM

The Standard & Poor’s 500 Index has a strong chance to reach 1,500 soon, says Jim Paulsen, chief investment strategist at Wells Capital Management.

That would represent a 4 percent increase from Tuesday’s close of 1,441.

“I look at two big catalysts here going into next year,” he tells CNBC. “One of them is, we’ve got to get the emerging-world economic recovery going again.”

Editor's Note: Economist Warns: 50% Unemployment, 100% Inflation Possible

Second, he says, the U.S. economy must show it can sustain a recovery apart from the Federal Reserve’s easing.

“I think we might accomplish both of those,” Paulsen notes.

Indeed, the U.S. economy is already well on its way, he maintains. Paulsen cites the drop in unemployment to 7.8 percent in September from 8.1 percent in August, consumer confidence at a four-year high, the rebound in home prices and rising auto sales.

“[W]hile people are worrying about how weak things are, we’re growing about 2.3 percent in the last year,” he says. And a move toward 3 percent could mean strong gains for the stock market.

Some experts disagree with Paulsen’s optimism, saying that a decline in earnings growth will send stocks south.

“Earnings season is not starting off to be a good one,” Bruce McCain, chief investment strategist at Key Private Bank, tells MarketWatch.

The International Monetary Fund’s reduction of its forecasts for global economic growth this year and next weighed on stocks Tuesday.

Editor's Note: Economist Warns: 50% Unemployment, 100% Inflation Possible

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