Dow Average May Sink to 5,000, Boockvar Says

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Dow Average May Sink to 5,000, Boockvar Says
By Thomas R. Keene and Ken Prewitt

Oct. 23 (Bloomberg) -- The Dow Jones Industrial Average may sink as low as 5,000 next year, a 41 percent decline from its current level, according to Peter Boockvar of Miller Tabak & Co.

``The market's going to overshoot on the downside,'' Boockvar said in a Bloomberg Radio interview yesterday. ``When that occurs, I'll be a raging bull.''

The CHART OF THE DAY shows 40 years of the Dow average. It last closed below 5,000 on Nov. 20, 1995. A retreat to that level would represent a 65 percent plunge from its all-time high of 14,164.53 set in October 2007.

Earnings estimates are too high and when investors realize that, they will drive the stock market lower, added Boockvar, Miller Tabak's New York-based equity strategist. Companies in the Standard & Poor's 500 Index will earn a total of $60 a share in 2009, not more than $90 as some analysts estimate, he said.

To contact the reporters on this story: Thomas R. Keene in New York at tkeene@bloomberg.net; Ken Prewitt in New York at kprewitt@bloomberg.net.