(Bloomberg News) The Standard & Poor's 500 Index has the potential to reach 1,700 before the end of the year should economic growth surprise investors the same way falling bond rates did in 1995, Birinyi Associates Inc. said.

Reaching that level would mean a 24 percent rally from yesterday's close of 1,365.68, data compiled by Bloomberg show. The benchmark gauge for U.S. equities gained 102 percent since it reached a 12-year low on March 9, 2009 and, in 2012, is off to its best start to a year since 1991, the data show.

An expansion that exceeded forecasts in the world's largest economy would help stocks rally after economists tempered their estimate for growth in 2012 to 2.2 percent from 2.3 percent earlier in the year, according to Laszlo Birinyi, who was among the first to suggest buying stocks in March 2009. The potential for surprise is similar to 1995, when the yield on the 30-year U.S. Treasuries fell 1.93 percentage points, even as Wall Street predicted they would gain, according to a report from the Westport, Connecticut-based firm.

"In 1995, the consensus trade was higher yields, today it is tepid economic growth and the market is suggesting -- perhaps insisting -- an alternative to that consensus," Birinyi wrote in the note today. "We continue to be bullish and would encourage a more aggressive posture."

Should economic data show signs of improvement, the S&P 500 may post a rally similar to the bull market that started in 1982, when the index advanced 229 percent, or the one that began in 1990, when it surged 302 percent, according to Birinyi. Reports on home sales and jobs have been better than estimated so far in 2012. The Citigroup Economic Surprise Index for the U.S. is at 45.1, up from negative 117.2 in June.

'Distinct Possibility'

"If the market is right and the economy surprises us on the upside, gains similar to 1982 and 1990 are a distinct possibility and one which no one has entertained," he wrote.

He stood by his bullish calls last year even as the S&P 500 fell five straight months starting in May. He said on Sept. 12 that U.S. companies were earning too much for the bull market to be derailed by Europe's debt crisis. The S&P 500 is up 18 percent since then. Birinyi advised investors to "be in the market" during a Dec. 6 interview with Tom Keene on Bloomberg Radio's "Bloomberg Surveillance."