(Bloomberg News) Stocks would suffer after an initial jump should the Federal Reserve decide to extend economic stimulus beyond the June expiration of its current quantitative easing program, Oppenheimer & Co.'s Brian Belski said.

"We become excessively bearish if the Fed goes to QE3," Belski said in an interview on Bloomberg Television's "In the Loop" with Betty Liu. "We do not want to see QE3," the New York-based chief investment strategist said. "We think that only prolongs the inevitable when the Fed has to eventually sell these securities that they have been buying."

The Standard & Poor's 500 Index rose 7 percent in 2011 through yesterday amid higher-than estimated earnings and government stimulus measures. Chairman Ben S. Bernanke and the Federal Open Market Committee plan to complete a $600 billion bond purchase program, known as quantitative easing or "QE2" on Wall Street because it's a second round, in June while holding interest rates "exceptionally low" for an "extended period," according to a Fed statement last month.

"QE3 is a short-term event, which will cause the market to go higher because investors over the last 10 years have become so reliant on cheap money and low interest rates," said Belski, who recommends investors sell into any rally in stocks if QE3 occurs.

Belski estimates the S&P 500 will end 2011 at 1,325, with companies in the index earning $90 a share. Belski's estimate is below the mean of forecasts compiled by Bloomberg as of May 31. The average estimate of 13 strategists calls for the benchmark measure to end 2011 at 1,402. He is forecasting the benchmark gauge for U.S. stocks will end 2012 at 1,475 and that companies will have a per-share profit of $103 for the year.

S&P 500

The S&P 500 fell 1.1 percent to 1,330.61 as of 12 p.m. in New York today, snapping a four-day advance as manufacturing expanded at the slowest pace in more than a year and employers hired fewer workers than forecast.

"On a near-term basis, if we start to see negative employment growth for a couple of months, that would not be good," Belski said. "It would shock the system and investors would pour even more money into bonds."

Employment increased by 38,000 last month, the smallest rose since September, from a revised 177,000 in April, according to figures from ADP Employer Services released today. The median estimate in the Bloomberg News survey called for a 175,000 advance for May.

A separate report showed the Institute for Supply Management's factory index fell more than projected to 53.5 last month, the lowest level since September 2009, from 60.4 in April. Economists projected the gauge would drop to 57.1, according to the median forecast in a Bloomberg News survey.

Charles Plosser

Federal Reserve Bank of Philadelphia President Charles Plosser said last month that the U.S. economic recovery is nearing a point where the central bank should begin pulling back record stimulus and that a third round of quantitative easing, or QE3, is unlikely. The Fed hasn't set out a timeline for shrinking its $2.7 trillion balance sheet or raising rates from the zero-to-0.25 percent range that's been in place since December 2008.