JP Morgan raises year-end target on S&P 500

JP Morgan Securities raised its year-end target on the Standard & Poor's 500 index to 1160 from 1100, to reflect its higher 2010 earnings expectations.

The brokerage also said that improvement in payrolls, stabilization in home prices, and greater M&A in 2009 versus 2008 could act as potential catalysts and push the index higher.

"We believe industrials, technology, and energy are likely to see the greatest upside into year-end, given their greater GDP sensitivity and current low relative valuations, the brokerage said in a note to clients.

J P Morgan raised its 2010 earnings view to USD 80 from USD 76 for the S&P 500, saying the 2009 higher earnings base was "mostly sustainable."

Continued low interest rates and expected GDP expansion should enable companies to generate substantial operating leverage, the brokerage said.

Investors continue to underestimate the earnings power of corporate America, given the combination of stringent cost-cutting, dollar support and strong financial positions, the brokerage said.

The S&P 500 index closed at 1,094.90 on Thursday.