The U.S. stock market will gain between 7 percent and 12 percent in 2009, despite an economy that will continue shrinking for at least the first half of the year, a top BlackRock executive said on Tuesday.
Robert Doll, chief investment officer of global equities at BlackRock the largest publicly-traded U.S. asset manager, said the S&P 500 could reach anywhere from 1,000 to 1050 by year-end, adding that emerging market equities would fare even better.
"With record fiscal and monetary stimulus, substantially lower oil prices, much cheaper valuations, significant negative sentiment and lots of cash on the sidelines, it is likely that stocks will begin to look 'over the valley' sometime in 2009 and experience a noticeable rally," Doll said at a press briefing.
The bottoming process for U.S. equity markets began on October 10, 2008 and was further confirmed by a second market low on November 21, Doll said. Going forward "we should see multiple digit percent rallies as well as declines all through the year" in U.S. stocks, Doll said.
Among sectors, Doll expects energy , healthcare and technology to outperform utilities, financials and materials in 2009.
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CNBC.com with wires