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Second Quarter Outlook: Analyst Sees Strong Tech, Soft Consumer Sector

Kevin Divney, chief investment officer and portfolio manager for Putnam New Opportunities Fund, told CNBC’s “Squawk on the Street” that he believes there will be some second-quarter earnings surprises.

“I think management has been much more cautious over the last three years,” Divney said Monday. “…I think in technology, [forecasts will] be a little under, but in consumer, they’ve been bearish and that could be right.”

Overall, earnings grew about 10% in the first quarter, and the second quarter estimate is for earnings to grow about 7%.

Year-to-date, the Dow Jones Industrial Average has gained 7.59%; the S&P 500 has gained 6%; Nasdaq has gained 7.78% and the Russell 2000 is 5.85%.

Divney said he likes National Oilwell Varco because the long-term outlook is solid for equipment used in exploration and development of energy.

He also likes Nike, because it’s a strong brand and the company has the ability to increase cash flows by cutting manufacturing costs.