-->NEW YORK (Reuters) - Wall Street strategists are guardedly optimistic that stocks will rise from near five-year lows by the end of the year, even as they atone for the errant bullish calls they made earlier this year, a Reuters poll shows.

Most gurus say conflict with Iraq won't unsettle investors any further, corporate scandal has mainly passed, economic conditions are improving, and stocks are undervalued.

This week's poll of 15 strategists gave a mid-range forecast for the Standard & Poor's 500 Index <.SPX> to end 2002 at 1,000, up nearly 19 percent from Thursday's close of 843.

The Wall Street strategists are hopeful that stocks' inglorious slide from early 2000 peaks are currently establishing a floor near the S&P's July 23 close of 798.

"It typically takes two to three months to form a market bottom," said Tom Galvin, strategist for Credit Suisse First Boston."If we can get through the next two weeks of earnings pre-announcements, we can feel more comfortable a bottom has been established."

Of course, strategists' targets may overstate actual optimism. Some gurus, singed by past errors, now decline to publish forecasts.

WAR, SCANDAL

At the end of 2001, Wall Street strategists had a median estimate that the S&P 500 would reach 1,350 by year-end 2002.

In the latest poll, 10 analysts gave a mid-range forecast for the Dow <.DJI> to end 2002 at 9,250, up 16 percent from Thursday's 7,942 close. Forecasts ranged from 8,500 to 10,250.

Most analysts are assuming the market is already pricing in the worst from any potential conflict in Iraq.

"Yes, we worry about war, but the great economic concern of war is what might happen to oil prices and the length of time it might take to (effect a) regime change," said Tobias Levkovich, strategist at Citigroup's Salomon Smith Barney unit.

Past oil price spikes that proved damaging -- during 1973, 1979 and 1990 -- hurt because of their length, Levkovich said. But once the U.S. attacked during the Gulf War ( news - web sites), prices plunged.

Concern has diminished a bit over another potential obstacle to stocks' recovery -- further scandals like those that rocked energy giant Enron, telco WorldCom and conglomerate Tyco.

"The scandals are starting to fall off the front page," said CSFB's Galvin, adding investors' perception of corporate ethics has risen, albeit"from kerb levels."

Galvin says regulators have helped to restore confidence with steps such as enforcing a mid-August deadline for business leaders to attest to the accuracy of their corporate accounts.

IMPROVED ECONOMY

The pundits are also assuming the U.S. economy won't fall back into a re-run of last year's recession.

"It's a modest recovery by historical standards, softer than typical," said Charlie Reinhard at Lehmans, but added:"It doesn't look as though it's going to double dip.

"Temporary staffing agencies are seeing better demand...third quarter earnings will be up five to 10 percent for the first time in seven quarters, corporate cash flow is improving, and business confidence is stabilizing," said CSFB's Galvin.

Besides, he says, official interest rates at 40-year lows have enabled consumers to refinance their home loans, saving money on loan repayments or borrowing more to spend.

"The refi (refinancing) boom will probably lead to a reacceleration of retail sales in the fourth quarter, which will drive investor demand at the start of '03, and begin to get a business investment cycle going," Galvin said.

As worries over war, scandal, and the economy begin to recede, investor psychology should improve, pundits say.

For the end of 2003, 13 strategists gave S&P forecasts ranging from 1,000 to 1,650. Dow forecasts from nine strategists for end-2003 ranged from 9,000 to 11,000.

STOCKS CHEAP VS. BONDS

So what about the ratios that still indicate stocks are overvalued? Bullish gurus dismiss them as invalid or inadequate.

Lehmans sent a note to clients this week finding fault with ratios such as price-to-replacement book, dividend yield, and price-to-reported earnings per share.

They say price-to-book fails to capture companies' substantial intellectual property; dividend yield is out of date because companies no longer emphasize dividends; and reported earnings include restructuring charges and write offs which exaggerate overvaluation by peaking during a recession.

The relative value of stocks compared with bonds is particular cause for strategists' optimism.

"Over the next 12 to 18 months there is a real chance for stocks to beat bonds," said Jim Paulsen, strategist with Wells Capital Management in Minneapolis."There has been one whale of a revaluation of the stock market...look at the S&P 500 dropping almost by half since March 2000."

Now, stocks are about 65 percent to 70 percent cheaper relative to bonds than they were, Paulsen said.

Stocks are likely to return six percent to eight percent over the next five years, while bonds will probably eke out a one percent return, according to Morgan Stanley's Galbraith.

"In a low-return world, such equity results are quite competitive," he told clients last week in a note entitled"Returns to Reality."

Quelle: Yahoo.com

Angesichts dieser Bullishness habe ich wenig Zweifel, dass wir nicht mitten in einer drei down stecken mit einem SPX in Richtung 570-600 vor Ende 2002.

Gruss

Pancho