S&P 500 Forecasts

longzhang

Profit at S&P 500 companies is forecast to rise 17 percent to $99.05 a share in 2011 and 14 percent to $112.81 in 2012, according to average analyst estimates compiled by Bloomberg.

Stocks in the S&P 500 are moving in lockstep with each other by the most since at least 1990, a sign that the market’s biggest retreat in three years may not be over, according to MF Global Holdings Ltd. The average correlation coefficient between the 500 companies and the index was 0.8268 on Aug. 18, using 60 days of data, according to MF Global.

High correlation “is usually the case in a bear market, when investors are liquidating equities as an asset class,” Craig Peskin, co-head of technical analysis at the New York- based firm, wrote in an e-mail on Aug. 18. “In a bull market, when investors are differentiating, we see low or falling correlation.”

Correlation among S&P 500 stocks exceeded 0.78 twice previously, according to MF Global. After the first time, on Dec. 1, 2008, the S&P 500 declined 17 percent to a 12-year low on March 9, 2009. Correlation peaked again on July 26, 2010, when the benchmark slipped 6.1 percent over the next month, data compiled by MF Global and Bloomberg show.