US stocks may still rally before the end of the year, Citigroup Inc's chief US equity strategist said. "Many investors will try to position for a rally in the fourth quarter - thus buoying the market in September," Tobias Levkovich, the bank's chief equity strategist, wrote in a research note to clients.
Levkovic also wrote that the bank's main concerns for the fourth quarter include the likelihood that consensus estimates for earnings growth in 2006 need to come down, as well as worries about the replacement of Federal Reserve Chairman Alan Greenspan next year and geopolitical woes.
"We continue to think that sell-side earnings expectations for double-digit growth are too optimistic, and that downward revisions could drag down markets," he said.
Through the stock market's close on August 25, two of the three major US stock indexes were still down for the year so far.
The blue-chip Dow Jones industrial average was down 3.08 percent for the year to date, while the tech-laced Nasdaq Composite Index was down 1.89 percent.
Only the broad Standard & Poor's 500 index was in positive territory for the year. At Thursday's close, the S&P 500 was up just 0.04 percent for the year to date.
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