Finance Yard

NEW YORK (MarketWatch) — Bank of America Merrill Lynch raised its earnings forecast for the S&P 500 Index on Monday, citing better-than-expected performance from some sectors in 2009. For 2010, analysts led by David Bianco raised the firm’s earnings estimate to $75 from $73 a share. For 2011, he raised the estimate to $85 from $83. The firm also said it expected 2012 earnings to rise even further, to $90 a share. “The increase in our EPS estimates is mostly from technology and also from consumer discretionary and a little from healthcare,” Bianco, the firm’s chief U.S. equity strategist, wrote in a note. The technology sector added $1.50 to the 2010 and 2011 S&P 500 estimates. The analysts said they expect a strong earnings recovery on rising financial sector profits and healthy non-financial profit growth “despite a subdued US G.D.P. recovery forecast.”

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SAN FRANCISCO (MarketWatch) — Activist investor Carl Icahn said Monday that he supports the appointment of John Thain as chief executive of lender CIT Group . Icahn Associates, an investment firm run by Icahn, bought a lot of CIT debt and pushed for changes to the company’s board as it went through bankruptcy last year. When CIT emerged, Icahn’s firm became one of the largest shareholders of the company. “He’s a very good pick for the job,” Icahn said in an interview. “Thain has a pretty good history of operations and making things happen.” Icahn also said CIT has “great” lending platforms that could be revived with access to cheaper and more stable financing. “We’re hoping he can bring those platforms back to use,” Icahn said. “One of the things we hope would be to build the bank up to finance more loans through there.”

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LONDON (MarketWatch) — The cost of insuring Spanish and Portuguese government debt against default via credit default swaps hit new records Monday, while the cost of insurance for Greek debt also rose, according to CMA DataVision. The spread on five-year Portuguese credit default swaps rose from 227 basis points late Friday to a record 244.06 basis points Monday. That means it would cost $244,060 a year to insure $10 million of Portuguese government debt against default for five years. The five-year Spanish CDS spread rose to a record 172.9 basis points from 166.5 late Friday. The Greek CDS spread widened to 426 basis points from 407.5 Friday.

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