Amid a market reeling from tightening financial conditions, Bank of America Merrill Lynch has dimmed its hopes for the stock market this year.

The influential Wall Street firm on Friday cut its full-year forecast from 2,200 to 2,000, citing a declining outlook for growth as well as a sapping of market liquidity. Morevoer, the firm, led by equity and quant strategist Savita Subramanian, warned of "significant near-term downside to current levels."

About the only good news from the change is that the forecast sees substantial upside from the current level — about 8 percent from the level where the index traded during Friday's relief rally. The full-year return, accounting for the plunge so far, would be 2.1 percent should BofA hit its target.

"Risks have increased," Subramanian said in a note to clients. "While this (forecast revision) still implies attractive upside to U.S. stocks through year-end, unless we see signs of a growth recovery, there may be significant near-term downside to current levels."