There's no denying that 2000 has been a real bummer for the stock market.

The year 2000 will long be remembered for its seemingly unstoppable gains followed by equally impressive losses. This year through Dec. 15, the

S&P 500 Index is down 10.7%. The

Dow Jones Industrial Average is behind 9.2%, while the

Nasdaq Composite Index is off a whopping 34.8%.

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But if stock market strategists are to be believed, Wall Street may be poised to post a bit of a comeback during 2001.

About this time of year, market gurus start to take a long gaze into their crystal balls to see what lies ahead. Believe it or not, many of them remain confident that significant stock gains are not a thing of the past, despite the wild-and-woolly ride the market has taken over the past 12 months.

In the face of 2000's dreck, experts still think the opportunity for intelligent investment in the stock market exists. A poll of top market strategists -- from the staunchest bulls to the strictest bears -- shows that, on average, the professionals predict the S&P 500 will hit 1626 by the end of 2001. That's a 24% gain from Friday's close.

"We're ending a chapter of subnormal returns," said Charlie Reinhard, senior strategist at

Lehman Brothers

. "And we're opening a period where the market is going to perform much better." Reinhard thinks the S&P is 13% undervalued and forecasts that it will touch 1675 -- one of the more bullish targets on the Street -- by the end of 2001. The 1675 figure was trimmed within the past week from a previous 1800 forecast.

By all means, predicting the future is tricky business, particularly in today's volatile climate.

"We had a fabulous 1999 and a disappointing 2000," said Arthur Hogan, chief market analyst at

Jefferies & Co.

"Daytraders, who lost their shirts over the past year, have learned a valuable lesson." Safe money says they'll work hard not to repeat their mistakes.

Beyond the psychological impact of the past year's losses, investors in 2001 also likely will have to cope with an economic slowdown, decreased corporate profits and a burst in the technology bubble. Things have changed, and moving forward, market participants will have to come to grips with the fact that they won't see an 86% return on the Nasdaq, which they witnessed in 1999.

The good news is that most pros feel the economy is slowing to a more sustainable level of growth. During the late 1990s,

gross domestic product -- which measures the pace of the economy -- was on a tear, hitting a peak of 8.3% growth in the fourth quarter of 1999 and prompting the

Federal Reserve to combat inflationary risks with a series of interest rate hikes. For the coming year, economists are predicting, on average, 2.5% GDP growth.

What's more, they anticipate the Fed will cut interest rates next year, although their predictions on how much differ. "Within the first six months of 2001, the Fed will cut rates," remarked Joseph Battipaglia, chief strategist at

Gruntal

, who estimates the S&P will reach 1650 by the end of the year.

Just days ago, Fed chief

Alan Greenspan acknowledged that the economy is at risk of slowing too much and indicated that the central bank will soften its stance in the months ahead.

Folks in the bearish camp have raised the specter of serious economic deceleration and have talked about the possibility of a recession. "There is such strong negative momentum in cyclical pieces of the economy that it will take a while for an easing to show in the equity market, and then in the economy," said Doug Cliggott, market strategist at

J.P. Morgan

. Cliggott has very limited expectations for the S&P 500, forecasting that it will top out at 1400 next year.

But many strategists are more hopeful. "Earlier this spring, people were saying that the economy was booming. They said there was a huge inflation problem and that the Fed might take rates up to 8%," said John Bartlett, market strategist at

Commerce Bank

. "We didn't buy into that hype. Similarly, we don't think now that we're going to fall into a recession."

Bottom line: "The market will need to learn to live with less growth," said Josh Feinman, chief economist at

Deutsche Asset Management

. "Investors must realize that they're not going to get the feeling of euphoria the economy gave us with a 5% growth rate. At 2.5%, we're not going to get those good vibrations."

For many experts, corporate earnings represent the biggest worry for the coming year. "The dominant feature of 2001 is going to be more bad earnings news, especially in those areas tied to the U.S. business cycle -- technology, consumer cyclicals and financials," noted Cliggott.

According to earnings tracker

I/B/E/S

, profit growth for the S&P 500 will be 8% to 9% in 2001, compared with an 6% to 8% expected gain for 2000. "We were hoping projecting double-digit returns earlier this year," said Joseph Kalinowski, market strategist at I/B/E/S. "Preannouncements brought that number down. And we're anticipating more of them."

Break It Down

Sectors in which I/B/E/S expects to see an increase in growth are consumer services, capital goods and consumer durables. The losers? Not surprisingly, the firm tabs PC manufacturers, software makers and semiconductor companies as sectors to dread.

As a result of earnings woes, some market specialists have taken a more defensive attitude. "In the decelerating earnings trend, we're looking at higher-quality companies," explained Kari Bayer, quantitative strategist at

Merrill Lynch

. "We're thinking about companies that can maintain stable growth in a slower growth environment." Those sectors include consumer staples, high quality financials and health care. "No matter what, people still have to eat, bathe and take drugs," she quipped.

Other authorities are more aggressive. In a recent report, Abby Joseph Cohen, chief strategist at

Goldman Sachs

, said that her firm's technology analysts "do not see evidence of particularly weak conditions. Indeed, demand appears to be solid in several categories, including enterprise hardware and software, and across several markets, including those in Europe and Asia."

Given the technology meltdown over the past year, that's encouraging news. Cohen, for her part, believes the S&P 500 will go to 1650 in 2001.

To be sure, Wall Street experts are less excited about the market than they were at this time last year, at the height of the New Economy jubilation. But they still think the market is poised for a rally and are ready to toast the New Year.

This year, though, the glass feels half-empty.