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Pros Say: A Pullback Won't Kill Rally (UPDATED)

Published: Monday, 11 May 2009 | 3:43 PM ET

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By: JeeYeon Park
CNBC.com Writer

Stocks retreated on Monday as investors took a breather after last week's 4.4 percent rally. After a better-than-expected payrolls report on Friday, a survey out Sunday suggested the U.S. economy will resume growing in the third quarter. Still, experts said be wary of the recent rally. Read and listen to what they had to say... (UPDATED)

The ‘Trojan Horse’ Health Care Plan

“Now is the time for health care reform, just not the way President Obama wants to do it,” said Greg Knapp, host of "The Greg Knapp Experience." He criticized Obama’s plan, calling it a “Trojan horse” — and saying it will cost taxpayers a lot of money.

Saving Credit Card Companies

The government must save the credit card industry "from itself," said Christian Weller of the Center for American Progress. He said new policies should be introduced so that it is more difficult for card companies to raise fees.

Economy Doesn’t Have to be ‘Perfect’

Mark Vitner of Wachovia said the stress-test results helped reduce some uncertainty in the banks, and as a result, encourages investors to do "a little more risk taking." He also said “we don’t have to have perfect conditions for the economy to recover."

Positive Housing Market Signs ‘For Sure’

James Lockhart, director of the FHFA, said based on information from recent data, there are “positive signs in the housing markets for sure.” He also said that the government is trying its best to make sure Fannie Mae and Freddie Mac will make it through and protect bondholders.

Pullbacks are ‘Perfectly Normal’

The market is extremely overbought and it’s “perfectly normal” for a pullback to occur, said Sean Clark of Clark Capital Management. He said confidence has returned to the market, and he expects the S&P 500 to reach 1100 "later this year, or earlier next year.”

Targeting Target’s Board Seats

Bill Ackman of Pershing Square Capital Management was critical of Target’s management for remaining in the credit card business at a time when credit is deteriorating and unemployment is rising. In March, Ackman launched a proxy battle for five of Target’s board seats. Target is Pershing Square’s single largest holding.

More Proxy Battles to Come

Former SEC Commissioner Joseph Grundfest said he expects more proxy fights among company boards in the near future. However, he said he is concerned that this opens up the corporate boardroom for a wide variety of issues that have "nothing to do with the efficiency of running the business or getting returns to shareholders."

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