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

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

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

Howstocks 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'sfiscal woes.

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

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

Whilethe bullish Levkovich notes that risks abound, such as a U.S. fiscaldeadlock, an unraveling of Europe's debt woes, an acute economicslowdown in China or a military flare-up in the Middle East, he saysthere are enough factors working in the market's favor to enable it tocontinue its climb.

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

His upbeat forecast alsois based on the fact the stock market remains attractively priced andhis belief that a boost in capital investment by companies and animproving job market will provide enough of a tailwind to ensure modestgrowth for the economy and corporate profits. He also cites the housingrecovery and emerging energy boom in the U.S. as additional catalysts.

Adams'more bearish thesis is straightforward. "Slowing global growth andpolicy uncertainty have combined to create a significant earningsslowdown," Adams says, adding that the U.S. is likely to flirt withrecession in early 2013. "We suspect the market will suffer downwardpressure until policymakers act decisively to convince investors thatthe U.S. debt house is in order."

Says Brian Belski, chiefinvestment strategist at BMO Capital Markets, who sees stocks risingroughly 10% next year: "A deal will get done. And the domestic recovery,led by U.S. companies churning out consistent and stable earnings, willsurprise 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%
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