Falling oil prices will be a net positive for many companies in the long run, but the rapid pace of the plunge is setting up a tricky situation for stock pickers ahead of earnings season, analysts told CNBC on Monday.
"The negatives hit quickly and the positives take more time. That's what the market is struggling with, along with, will there be a credit somewhere along the way," Bob Doll, chief equity analyst at Nuveen Asset Management, said in a "Squawk on the Street" interview.
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Analysts are anticipating the weakest quarter-on-quarter earnings growth in six years, and a lot of that is due to the plunge in oil prices, Doll said. Earnings for non-oil segments of the S&P 500 will take a hit from the strong dollar—which makes U.S. goods less competitive abroad—but will still be good, he said.
For that reason, investors should focus their U.S. investments in companies that do most of their businesses at home, where earnings are still going up nicely, he added.
He points to health care and technology as sectors that can perform without price increases, though the health companies will face some dollar headwinds, and investors will have to pick and choose tech stocks.
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In the defensive sector, he suggests setting up a pair trade with a long position in telecoms and short position on utilities. "I think they will make more in telecoms. That's why it's a pair trade."
Bill Stone, chief investment strategist at PNC Asset Management, also likes health care and said other spots with domestic focus to think about are the financial sector and real estate investment trusts in particular. These represent a play on PNC's belief that interest rates will stay low even after the Federal Reserve acts to allow them to rise.