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UBS Analyst Expects S&P 500 To Rise 8% - 9% This Year

Michael Ryan, head of research for UBS Wealth Management, told CNBC’s “Squawk Box” Tuesday that he expects the S&P 500 to rise 8% to 9% in 2007.

“The economy is slowing, but we don’t think it’s falling into recession,” Ryan said Tuesday.

He looks for “decent earnings growth” in a “fairly valued market” that invites selective investments.

In a slowing economy, Ryan likes defensive sectors such as consumer staples and healthcare. He also sees “some earnings momentum” in technology.

“We still like large caps for the simple reason that if the U.S. economy slows, as we expect it to, the areas that will be more vulnerable will be the pure plays -- the small caps, and mid-caps,” Ryan said. “The areas that have the ability to leverage global growth prospects -- the large caps -- will probably do better.”

Ryan said he doesn’t expect the Federal Reserve to cut interest rates this week.

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