UBS Strategist Bianco Cuts 12-Month S&P 500 Forecast to 1,500

By Michael Patterson

Oct. 6 (Bloomberg) -- UBS AG's David Bianco cut his 12-month forecast for the Standard & Poor's 500 Index by 9.1 percent to 1,500 and abandoned his year-end target, citing deeper-than- expected recessions in the U.S. and Europe.

Bianco, the New York-based chief equity strategist at UBS, reduced his 2008 per-share profit estimate for S&P 500 companies to $74 from $80 and lowered his 2009 projection to $86 from $90, according to a research note today.

Bianco's new 12-month forecast amounts to a 36 percent gain for the U.S. equity benchmark index from its close on Oct. 3 at 1,099.23. He abandoned his year-end target of 1,550 because of ``extreme uncertainty and volatility,'' Bianco wrote.

``We believe that the S&P 500 is significantly oversold and that very sizable appreciation from current levels is likely by early next year even with greater than normal investor risk aversion,'' he wrote.

The S&P 500 has declined 25 percent this year.

To contact the reporter on this story: Michael Patterson in London at mpatterson10@bloomberg.net.