BofA's 10 Reasons to Buy the Dip

Following the money in banking, economics and Washington

Even stock market bulls are feeling a little cowed by the events in Japan – though not to the point where they are pulling in their horns.

One of the loudest voices for a stock market rally, David Bianco of Bank of America Merrill Lynch, trimmed the low end of his expected first-half trading range for the S&P 500, saying the catastrophe in Japan raises the chances U.S. companies won't hit their earnings estimates.

The wall of not worried

Bianco now expects the S&P, recently up 1.6% for the year at 1,278, to trade between 1,250 and 1,400 this year. He previously put the big-cap stock index's low point for 2011 at 1,275.

Bianco said the quake, tsunami and nuclear disaster in Japan – which so far have claimed more than 3,300 lives with more than 7,000 people missing – "has tilted the balance from upside to downside risks to our EPS outlook."

Nonetheless he held his S&P 500 earnings forecast at $95 for 2011 and $102 for 2012. And in true bull form, he trotted out 10 reasons to buy the latest dip:

He adds that his year-end forecast of S&P 1,400 – which would represent a 9.5% rise from current levels – "reflects the possibility of tail risks." Which is reassuring, because 2011 is looking like a year in which we'll be seeing more of those.

Also on Fortune.com:

Follow me on Twitter at @ColinCBarr.

Completely agree with the idea of buying now!! I recently wrote a blog post about why the crisis in Japan will actually help the American market and economy. Also, the sowntrend is a healthy retracement that was long overdue! Here's the blog post: http://steetlifeblog.blogspot.com/2011/03/ahh-run-from-market-because-of-crisisit.html

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