Economic growth is sputtering and stock markets have taken one wild swing after another for several weeks now.
Top economists have grabbed headlines slashing economic growth forecasts, with many predicting sluggish growth rates and others worried that the economy will eventually double-dip back into a recession.
Now stock-market indices such as the broad S&P 500 are seeing their year-end forecasts headed to the chopping block. Gone are the days for forecasts of double-digit growth rates made earlier this year thanks to political spats in Washington and debt woes in Europe.
A growing number of Wall Street strategists who started the year with high hopes for double-digit gains in the stock market are slashing their return forecasts, with some now expecting stocks to finish 2011 in the red, USA Today reports.
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Wells Fargo, Barclays Capital, UBS and Yardeni Research have said they are no longer as optimistic over returns for this year as are Credit Suisse and Goldman Sachs, USA Today reports.
Wells Fargo's Gina Martin Adams cut her year-end target for the Standard & Poor's 500 index to 1250 from 1390.
Ed Yardeni of Yardeni Research slashed his 2011 target from 1250 to 1150, USA Today adds. That downgraded prediction would mean a 2 percent drop from Tuesday's close.
Douglas Cliggott at Credit Suisse has cut his year-end target to 1100, a drop of 6 percent from an earlier forecasts.
"The (economic) facts have changed," he tells clients.
The S&P is currently trading just over 1170.
Many investors have bolted from the stock market due to the volatility over the last several weeks, leaving mainly hedge funds and other speculative investors who make plays amid such wild swings.
"Individual investors pulled out, institutional investors as well," say NYSE Euronext deputy chief executive Dominique Cerutti said on France's BFM Business radio, as reported by the AFP newswire.
NYSE Euronext operates the New York Stock Exchange and the Paris-based Euronext.
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