NEW YORK--Insurers' stock investments in 2007 should seeprice/earnings ratio growth for the first time in 6 years,according to Robert C. Doll, vice chairman and chief investmentofficer of global equities at BlackRock Inc.

The prediction was one of 10 offered by Mr. Doll at a pressconference on how the markets would perform in 2007.

Among the reasons cited by Mr. Doll are: positive earningsgrowth, a calming of inflation concerns, and strong cash flow andliquidity.

The bright prediction, which would affect insurers' owninvestments as well as the separate accounts of their clients, wastempered somewhat by Mr. Doll's forecast that the U.S. economy willslow to 2-to-2.5 percent growth rate as non-U.S. growth remainsrelatively robust.

Mr. Doll said the slowing is due to factors such as weakness inthe housing market and a slowing in the industrial sector relatedto the slowing of the housing market.

That slowing, Mr. Doll continued, will be felt more on the Eastand West Coasts than in the middle of the country. These areasexperienced substantial increases in property value during therecent housing boom, he explained. Mr. Doll also said that anincrease in mortgage defaults was "almost inevitable" but alsonoted that it would be an increase that started from "pretty lowlevels."

Mr. Doll said that while the housing market was a contributor tothe "soft landing" of the U.S. economy, it would not derail theU.S. markets.

Among the sectors that Mr. Doll said will outperform othersectors this year are: energy, health care and technology. Reasonshe offered include: a health care sector that is "somewhatindependent of the economy"; attractive valuation levels andcompanies with cash on their balance sheets in the technology andhealth care sectors; and continued strong demand for oil and otherenergy sources.

With health care costs rising and health care expenses growingas a percentage of gross domestic product, the health care sectorwill continue to do well in the future, he added.

Between first-quarter 1950 and first-quarter 2006, thatpercentage increased from just under 3 percent to approximately 12percent, according to a Blackrock slide citing Haver: CIR U.S.Equity Strategy.

Other predictions made by Mr. Doll include Japan's increasednominal growth which will lead to equity market outperformance.

He also said he foresees the outperformance of large cap stockscompared with small cap stocks and a continued strong productivitythat will result in "inflation behaving itself."