Birinyi Raises Full-Year S&P 500 Forecast to 1,325

Birinyi Raises Full-Year S&P 500 Forecast to 1,325 (Update1)

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By Whitney Kisling

March 29 (Bloomberg) -- Birinyi Associates Inc. raised itsyear-end forecast for the Standard & Poor’s 500 Index to 1,325because of rallies by General Electric Co., Citigroup Inc. andMicrosoft Corp.’s shares.

The estimate from the research and money-management firmfounded by Laszlo Birinyi implies a 14 percent advance from lastweek’s closing price and a full-year increase of 19 percent.Today’s report cited 2010 gains exceeding 20 percent for GE andCitigroup as well as Microsoft rising above $30 last week.

Birinyi said the S&P 500’s reversal of losses on March 22shows that markets are exhibiting strength. The benchmark indexfor U.S. stocks lost as much as 0.6 percent after the biggestoverhaul of the health-care industry in four decades and concernabout Greece’s budget deficit, as well as Tiffany & Co., theworld’s second-largest luxury jewelry retailer, reporting lessprofit than the average analyst estimate. The S&P 500 rose 0.5percent that day and went on to advance a fourth straight week.

“Given our trading background and approaches, we areimpressed with the resilience of the market which, in effect, iswhat trading desks mean when they say the market ‘acts well,’”according to the report Birinyi sent to clients today. “Largestocks are now likely to be contributors rather thandetractors.”

Birinyi’s 2010 S&P 500 projection compares with the 1,243average estimate of strategists surveyed by Bloomberg. In May oflast year, Birinyi said stocks are “in a bull market.” Theindex has surged 72 percent since March 9, 2009.

“As we have regularly noted, the negative case is neithercompelling nor persuasive,” he wrote. “The economy could haveanother dip, earnings could falter, inflation could appear, andGreece could default. Opinions are, as we have painfullylearned, poor currency in the market.”

To contact the reporter on this story:Whitney Kisling in New York at [e-mail].