Tags: recovery

Legg Mason: S& P 500 to Hit 1,350 By 2010

By    |   Thursday, 06 Aug 2009 12:06 PM

The Standard & Poor's 500 Index should hit 1,350 by at least the end of next year or early 2011, Legg Mason Capital Management said. Early on Wednesday, the index was hovering around 975.

The index has risen by 11 percent since July 10 as companies such as Caterpillar and 3M have reported earnings that have beaten expectations, indicating the recession is bottoming out, according to Bloomberg.

Other companies should show improvements, which will bring investors back to the stock index as losses subside.

“The improvement of fundamentals, in addition to the abundance of liquidity should limit market corrections to a range of minus 10 to minus 15 percent,” wrote Robert Hagstrom, a fund manager at Legg Mason.

Indeed, U.S. stock prices have been rising and home sales appear to be on the rebound as well. Yet full-scale economic recovery still faces one huge hurdle — consumer confidence.

The consumer confidence in July fell to 46.6, down from 49.3 in June, a figure below economists' expectations. A poor job market is scaring many Americans away from spending.

"Even though we have seen an improvement in economic indicators, there hasn't been any meaningful improvement in household finances," said Mark Vitner, senior economist at Wells Fargo.

"Consumers are not in the position to step up their spending in a major way. This doesn't bode well for the back-to-school season."

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The Standard & Poor's 500 Index should hit 1,350 by at least the end of next year or early 2011, Legg Mason Capital Management said. Early on Wednesday, the index was hovering around 975.The index has risen by 11 percent since July 10 as companies such as Caterpillar and 3M...
recovery
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2009-06-06
Thursday, 06 Aug 2009 12:06 PM
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