Though the Dow is down more than 30 percent this year and a nasty recession looms, half of the investment professionals polled by Barron's say they are "bullish or very bullish" about the stock market's prospects through the middle of next year.
Bullish managers see the Dow ending the year at 10,642, a 14 percent rise, according to the investing weekly, although that leaves blue chips down 20 percent for the year.
Respondents to the survey, a cross-section of the nation's institutional investors, also see improvements for the S&P 500 and the Nasdaq.
The S&P will rebound to 1,141 by year end, up 18 percent but down 22 percent for the year. The Nasdaq could go to 2,013, up 17 percent but post a 25 percent loss for 2008, the newspaper reported.
With stocks at five-year lows, 62 percent of poll respondents say equities are now "undervalued."
Money managers tell the Barron’s poll that sentiment is shifting for stocks now that governments around the world are starting to make a joint effort to halt the financial crisis and get money flowing from lenders again.
A new study from newswire Bloomberg suggests a bull market could be in place by February, followed by economic expansion in the United States later in 2009.
Looking at the S&P 500, Bloomberg found that stocks rebounded four to five months ahead of the general economy in 1975, 1982, and 1991.
"The markets will turn before we know the economic recovery is going on," Robert Weissenstein, at Credit Suisse's private banking unit in New York, told Bloomberg.
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