“Analysts are boosting U.S. earnings estimates by the most in a year, a sign to Barton Biggs and Michael Shaoul that stocks will weather the biggest drop in U.S. economic forecasts since 2009.
Standard & Poor’s 500 Index profits may reach $104.73 a share in the next 12 months as consumer demand pushes sales up 13 percent, according to data from about 9,000 analysts compiled by Bloomberg. The income estimate rose 2.8 percent in the four weeks ended May 2. Analysts are turning more optimistic as economists cut projections for 2011 U.S. gross domestic product growth to 2.7 percent from 3.2 percent in March, the data show.
Falling commodity prices and economic data that have trailed forecasts by the widest margin since August sent the S&P 500 down 2.2 percent since its high on April 29. Declines were twice as much in stocks that led last year’s rally, the data show. To Traxis Partners LP’s Biggs, Kevin Rendino of BlackRock Inc. and Marketfield Asset Management’s Shaoul, earnings growth will reverse the losses and extend the index’s two-year advance of 97 percent.”
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