Abby Cohen Raises Targets on S&P; Index

Market technicians may be gloomy, but one of Wall Street’s best-known bulls on Wednesday turned yet more bullish.

Abby Joseph Cohen, strategist at Goldman, Sachs & Co., cut her earnings estimate for blue-chip companies in 1999--but still raised her price target for the stocks.

She revised her estimate of what the S&P; 500 companies will earn this year to $49 per index “share,” down from her previous estimate of $52.50. That’s an estimate of “operating” earnings, or results before one-time charges and gains.

But because 1998 actual results for the S&P; firms came in about $3 a share below her estimate, Cohen said, the new 1999 estimate still represents a 7% gain from 1998.

Moreover, she expects a further 8% gain in S&P; earnings in 2000.

With profits overall still growing, Cohen believes blue-chip stock prices can go higher, she told clients. Her new year-end target for the S&P; index: 1,325, up from a previous range of 1,275 to 1,300.

The S&P; index closed at 1,268.59 on Wednesday. So Cohen’s year-end target is just a 4.4% gain from this point--not much, but certainly better than a forecast of a plunge from current levels.

Her new year-end target for the Dow Jones industrial average is 10,300, which would be a 6.5% gain from Wednesday’s close.