Market Preview: So Far, So Good

NEW YORK (TheStreet) -- To put the recent run that stocks have enjoyed into perspective, Friday was the worst day of the year, and it wasn't all that bad.

The Dow Jones Industrial Average finished down less than 100 points, bouncing nearly 60 points off its session low, and the S&P 500 gave back just 0.7%, falling less than 10 points. Befitting its theatrical roots, Greece continues to provide drama, but it's hard to fathom that Thursday's bull has completely transformed into Friday's fraidy cat.

More likely, folks riding the wave saw a reason to sell and took it, locking in some profits ahead of the weekend. There also may have been some technical forces at work. All in all, though, the "so far, so good" theme is still intact for 2012.

Earlier in the week, Brian Belski, chief investment strategist at Oppenheimer & Co., had argued that the U.S. equity market is still in a "transitional phase" and that "the relative stability of U.S. fundamentals and economic conditions will provide an attractive alternative compared to other more volatile assets around the world in 2012."

In a comment that appeared a bit prophetic given Friday's selloff, Belski added, "However, the path to positive returns in the U.S. will not take a smooth route."

Oppenheimer has a year-end target of 1400 for the S&P 500.

Aside from Europe, corporate earnings will be a major factor in how 2012 ultimately shapes up.

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In running down the ho-hum numbers for the fourth quarter, FactSet noted that analysts' expectations for the first quarter are pointing to the end of a nine-quarter streak of earnings growth.

"As of today, the estimated earnings growth rate for the S&P 500 dropped to 0.0%," wrote John Butters, senior earnings analyst at FactSet, in commentary issued Friday. "The growth rate has steadily dropped from 8.0% on September 30 to 3.0% on December 30 to 0.0% today. Four sectors are predicted to see earnings growth in Q1 2012, while six sectors are predicted to see earnings decline."