Stocks stayed lower Tuesday after glum earnings forecasts from two major retailers and a homebuilder and worries over subprime loans. But Andrew Burkly, market strategist at Brown Brothers Harriman, is still bullish on the equity market. He joined "Street Signs" to name the sectors he foresees leading the second half of 2007.
Burkly told CNBC's Erin Burnett that the remainder of the year will be "pretty good" for stocks: "Not quite as good as the first half, but we should get up to 1600 or so on the S&P." He points out that that would constitute a 7% gain.
And which areas will drive the S&P higher? The strategist bucks the crowd and predicts energy will lead.
"Any time you have a big rally in a sector like [energy], people will want to take some profits," Burkly said. He concedes that "we're a little overbought," but maintains that "whatever pull-back we get, we still think the fundamentals are very strong" in the energy arena.
He noted that oil had hit a new high Tuesday, and augured that crude prices will return to "the highs of last year, $78, $79."