A money manager told CNBC's "Power Lunch" that stock buybacks, private equity and M&A activity will continue to drive the market, particularly for tech stocks.
Noah Blackstein, portfolio manager at Dynamic Mutual Funds, said business software giant Oracle's multibillion dollar buyouts of PeopleSoft, Siebel Systems, and most recently Hyperion Solutions, have led to a shortage of publicly traded software stocks.
"You've had hundreds of billions of dollars of equity disappear into private equity hands or through M&A," Blackstein said. "I think that, for the existing number of stocks, is quite a bullish indicator."
"There's been a big shrinkage of the number of investable stocks out there, for investors holding the S&P 500, I think that's positive," Blackstein added.
David Goerz, chief investment officer at Highmark Capital, expressed a similar sentiment for the overall market.
"We're getting back to the highs we saw in February, and we think it can go further," he said.
Goerz said he doesn't believe analysts have proper adjusted 2007 earnings estimates as quarterly profits roll in better than many had expected.
"They looked at what happened in 2006, but they hadn't fully incorporated the earnings surprise of 2006 and so we think there's some upside here," he said.