NEW YORK -- Where are U.S. stocks headed in 2013? Depending on which Wall Street firm's crystal ball you gaze at, the market could climb 14% or tumble 2%.

The average estimated return for 2013 is 7%, based on a review of already-published forecasts from eight investment strategists at Wall Street firms.

The most bullish comes from Citigroup's Tobias Levkovich, who sees the Standard and Poor's 500-stock index trading at a new record high of 1615 by year's end 2013, a rise of roughly 14% from Thursday's close of 1414. The most pessimistic forecast comes from Gina Martin Adams at Wells Fargo. Her 2013 year-end target is 1390, or a 2% drop from current levels.

How stocks fare next year will have a lot to do with if, when and how U.S. lawmakers resolve their fight over how best to address the nation's fiscal woes.

"Do we get a deal? If so, what does it look like?" says David Bianco, chief U.S. equity strategist at Deutsche Bank, who opted for a conservative year-end target of 1500, or mid-single-digit gain, to account for any possible market disappointment related to the cliff deal.

In general, if a fiscal cliff deal can be hammered out, and the economy isn't sent spiraling into recession due to growth-killing tax hikes and government spending cuts, it will remove one of the biggest negatives now confronting the economy and markets.

While the bullish Levkovich notes that risks abound, such as a U.S. fiscal deadlock, an unraveling of Europe's debt woes, an acute economic slowdown in China or a military flare-up in the Middle East, he says there are enough factors working in the market's favor to enable it to continue its climb.

"Some actions on fiscal policy to shrink deficits most likely will be enacted," Levkovich wrote in his report, "Setting the Scene for Twenty Thirteen."

His upbeat forecast also is based on the fact the stock market remains attractively priced and his belief that a boost in capital investment by companies and an improving job market will provide enough of a tailwind to ensure modest growth for the economy and corporate profits. He also cites the housing recovery and emerging energy boom in the U.S. as additional catalysts.

Adams' more bearish thesis is straightforward. "Slowing global growth and policy uncertainty have combined to create a significant earnings slowdown," Adams says, adding that the U.S. is likely to flirt with recession in early 2013. "We suspect the market will suffer downward pressure until policymakers act decisively to convince investors that the U.S. debt house is in order."

Says Brian Belski, chief investment strategist at BMO Capital Markets, who sees stocks rising roughly 10% next year: "A deal will get done. And the domestic recovery, led by U.S. companies churning out consistent and stable earnings, will surprise to the upside."

Good year for stocks ahead?
A group of top Wall Street strategists predict stock gains of 7%, on average, next year.
Firm		2013 year-end	% gain
Citigroup		1615	14%
Oppenheimer		1585	12%
Bank of Montreal		1575	11%
Goldman Sachs		1575	11%
Deutsche Bank		1500	6%
Morgan Stanley		1434	1%
UBS		1425	1%
Wells Fargo		1390	-2%
Avg.		1512	7%

USA Today