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Cohen sets 2000 targets
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December 16, 1999: 12:35 p.m. ET
Wall Street strategist sees S&P at 1,525, Dow at 12,300 by end of 2000
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NEW YORK (CNNfn) - One of Wall Street’s top stock strategists, Abby Joseph Cohen of Goldman Sachs & Co., forecast Thursday that the S&P 500 index will hit 1,525 by the end of 2000, a nearly 8 percent gain.
Cohen also predicted the Dow Jones industrial average will hit 12,300 by the end of 2000. That would be a gain of 9.6 percent over Wednesday's close of 11,225.32 and an increase of about 8 percent over the Dow’s all-time high of 11,326.04 set Aug. 25.
"The message is that we expect stock prices to reach new highs in 2000, although the gains will be more moderate than experienced in prior years,” Cohen wrote in a research report.
Goldman Sachs’ year-end 2000 target for the S&P 500 represents a gain of 6.4 percent over the S&P record high of 1,433.30 set Dec. 3. The S&P index closed at 1,413.33 Wednesday.
"The S&P 500 is ending 1999 at roughly fair value, in contrast to the notable undervaluation of prior years,” Cohen said. "This suggests that price appreciation will be closer to historical trends, as will volatility.”
The predictions marked the first time Cohen has publicly announced her targets for the end of next year. Previously, she had set an S&P 500 target of 1,475 to be reached by fall 2000.
Cohen predicted that 2000 would see a "mild rise” in inflation and that the Federal Reserve would be watchful, but said notable increases in global inflation or interest rates are unlikely. The impact of the Year 2000 computer bug problem "will be smooth, but expensive,” she said.
Cohen also forecast that S&P 500 operating earnings per share would rise 8 percent in 2000, slower than 1999’s double-digit pace. But profits may rise at a faster rate than forecast if global economic activity picks up moderately, she said. 
-- From staff and wire reports
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Goldman Sachs
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