Goldman lifts end of year stocks target

On the back of the rally in stocks many big name banks are boosting there stock forecasts, and Goldman Sachs are one of them. Goldman Sachs Group Inc. boosted its forecast for the Standard & Poor 500 Index, saying improving earnings will spur the steepest second-half rally since 1982.

The benchmark index for U.S. stocks will advance 15 percent from its June 30 level to 1,060 on Dec. 31, an increase from David Kostin’s prior projection of 940. The chief U.S. investment strategist at New York-based Goldman Sachs also lifted his 2009 and 2010 earnings estimates for S&P 500 companies to $52 and $75 a share, which are 30 percent and 19 percent higher than prior estimates.

Profits that beat analysts’ forecasts at companies from New York-based JPMorgan Chase & Co. to Intel Corp. in Santa Clara, California, helped boost the S&P 500 by 7 percent last week, the biggest gain in four months. Since March 9, the gauge has rebounded 41 percent amid speculation the economy is recovering from the deepest recession in a half century.

“You saw company after company either raise guidance or at least guide to the higher-end of the previous range,” Kostin said in an interview today. “The early reporting companies are often interesting barometers for what’s likely to take place.”

JPMorgan, the second-largest U.S. bank, climbed 14 percent last week after saying earnings rose for the first time since 2007 on record investment banking fees. Intel, the biggest semiconductor company, added 17 percent last week after lifting its forecast for third-quarter revenue. The 43 companies in the S&P 500 that have posted results since July 8 have beaten analysts’ estimates by 15 percent, on average.

Now with pretty much all the power in their hands, and the power to move the market as they please, it wouldn't be surprising if this is true, although I still remain a bear and think we will come off again before year end.