Street Sees S&P 500 Scaling the Wall It Hit in Year’s First Half

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One solace for bulls after the worst first half for U.S. stocks in five years: every strategist on Wall Street sees the Standard & Poor’s 500 Index rising.

The benchmark gauge finished the quarter with a decline of 0.2 percent, ending a string of gains stretching back more than two years. Prospects for higher interest rates and Greece’s travails have frozen a market that rose 47 percent between 2011 and 2013.

Professional stock forecasters remain bullish, saying the economy is too strong for the second-longest U.S. rally since 1950 to end now. They’re sticking to forecasts for the S&P 500 to rise 8.2 percent by year-end, data compiled by Bloomberg show.

“Underlying data in the U.S. economy and other places around the world seems to be getting better,” Tom Mangan, who helps oversee about $6.4 billion as money manager at James Investment Research in Xenia, Ohio, said by phone. “That could be a building base for a strong second half.”

The S&P 500 ended the first half with a gain of 0.2 percent, the worst showing since 2010. The advance sputtered with the index mired in one of the tightest ranges in two decades, as the Federal Reserve signaled it intends to raise interest rates this year should the economy warrant it.

Stocks tracked by the gauge tumbled 2.1 percent Monday, the most since April 2014, as Greece surprised investors by shutting lenders and imposing capital controls after debt negotiations broke down. The S&P 500 rebounded 0.7 percent at 4 p.m. in New York.

Economy, Earnings

For the most part, investors have shown an ability to look beyond the turmoil in Greece to focus on U.S. economic growth and corporate profits. The S&P 500 is 2.5 percent from an all-time high reached May 21, and came within one point of the level last week.

Strategists have been unfazed by oil’s plunge, stagnating profits and the widest swings in fixed-income and currency markets since the 2013 taper tantrum. Their average estimate fell 1 point since January, according to a Bloomberg survey of 21 firms.

Stocks in the S&P 500 are up more than 200 percent since March 2009 as earnings doubled and companies bought back about $2 trillion of their stock.

Consumer Confidence

Data Tuesday showed consumer confidence increased more than forecast in June as Americans grew more optimistic about the economy and the labor market. The government’s June payrolls report later this week is estimated to show employers added 230,000 jobs, after a 280,000 increase in May, the most in five months.

Harsh winter weather and port delays that damped gross domestic product at the start of the year have given way to increases in consumer spending and housing. The economic measure is expected to expand 2.2 percent for the full year, and increase 2.8 percent in 2016.

We’ll see “increased economic activity with GDP accelerating in the fourth quarter,” Chad Morganlander, a money manager at Stifel, Nicolaus & Co. in Florham Park, New Jersey, which oversees about $170 billion, said by phone. Investors should “keep a careful eye on earnings, as well as economic growth,” he said.

Earnings Season

Second-quarter earnings season begins next week. Analysts forecast S&P 500 corporate profits will turn positive in the fourth quarter and lead to earnings growth of 1.2 percent for all of 2015, according to data compiled by Bloomberg.

U.S. stock traders looking for a bottom can also point to two indicators. The S&P 500 on Monday came within 5 points of its average price during the past 200 days. Stocks have only crossed the level once since 2012 -- the period of last October’s selloff, which gave way to an 11 percent advance at the end of 2014.

The gauge’s relative strength index, which measures the speed of swings, slipped below 35.5 that same day, for the lowest reading since December. Technical analysts consider 30 a point where rallies are likely to materialize.

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