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More Offense, Less Defense: CIO

The stock market is unlikely to see gains in the second half of 2013 as strong as in the first half, but a few sectors offer potential, James Dunigan of PNC Asset Management Group said Monday.

"In the second half of the year, we think it's probably better to play more offense than defense," he said. "So, that 12 percent growth we saw in the S&P probably does not repeat itself in the same way in the second half of the year."

On CNBC's "Fast Money," Dunigan said that certain sectors were poised to offer opportunity for the rest of the year.

(Read More: Banks Pop Ahead of Earnings)

"So, where we started off this year with staples, utilities, telecom outperforming, we think it's time to restructure and reposition portfolios more in those cyclical names, and that would be consumer discretionary, industrials, as you say, materials and financials," he said. "More offense as opposed to defense."

Dunigan, with $116 billion in assets under management, said that earnings would drive stock gains.

"I think it'll be difficult to get a read on the second quarter," he added, saying that he would look to guidance in quarterly earnings reports which kick off this week.

Dunigan also said that he thought yields on the 10-year Treasury bill would average 2½ percent for the second half of the year.

(Read More: Who'll Benefit From a Rising Yield Curve)

"Could it touch 3 percent? It certainly could, but we think based upon those economic fundamentals that we see – and they are improving – likely that we've overdone things a bit here and it settles back in and averages 2 ½ percent for the balance of 2013," he added.

"There's no doubt that the data is improving. Seventy percent of economic data in June beat the estimates, so higher better data begets higher rates, without a doubt."

Trader disclosure: On July 8, 2013, the following stocks and commodities mentioned or intended to be mentioned on CNBC's "Fast Money" were owned by the "Fast Money" traders: Mike Murphy is long BAC; Mike Murphy is long FB; Jon Najarian is long ARMH; Jon Najarian is long COP; Jon Najarian is long DFS; Jon Najarian is long EXC ; Jon Najarian is long KSS; Jon Najarian is long MAR ; Jon Najarian is long MGM; Jon Najarian is long MSFT; Jon Najarian is long OKE; Jon Najarian is long TMO; Jon Najarian is long XLU; Joe Terranova is long VRTS; Joe Terranova is long TRV; Joe Terranova is long AXP; Joe Terranova is long OXY; Joe Terranova is long CRUDE OIL FUTURES; Joe Terranova is long MINI S&P FUTURES; Stephanie Link is long AAPL; Stephanie Link is long GS; Stephanie Link is long JPM; Stephanie Link is long WFC; Stephanie Link is long CSCO; Stephanie Link is long EBAY; Stephanie Link is long FB; Stephanie Link is long VALE; Stephanie Link is long GE.

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