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S&P to Hit 1,200 in 3-6 Months: Strategist

Monday, 28 Sep 2009 | 12:17 PM ET

Stocks opened higher on Monday after a wave of merger-and-acquisition activity. Are the markets positioned to head higher or should investors remain cautious?

Morning Market Edge
A look at the latest news on the markets, with Phil Orlando, Federated Investors chief equity market strategist

Market strategists Phil Orlando at Federated Investors and Stephen Wood at Russell Investments shared their insights. (See their sector plays, below.)

“The recession is over—we think it ended in the second quarter,” Orlando told CNBC.

“We think third- and fourth-quarter corporate earnings are going to be better than expected: modest topline gains, stronger than expected bottom-line…and as estimates continue to move up, we think the markets are going to grind higher and we’re going to be at 1,200 [on the S&P] in the next 3 to 6 months.”

More Investor Intelligence:

Wood said he is “guardedly optimistic” on the markets.

“What we’re looking at is a transition period where we’re transitioning from recession into growth, but the growth is going to be slow,” he said. “The consumer is not dead but damaged, I think corporate earnings recover a bit—but we’re not going to recover back to the 2006 levels any time soon.”

Orlando Likes:

Technology*

Materials

Financials

Consumer Staples—Food, Beverage and Tobacco

Health Care—Equipment and Services

Emerging Markets

Orlando Avoids:

Treasurys

Wood Likes:

Technology*

Consumer Discretionary

Financials

Wood is 'Underweight':

Health Care

Utilities

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Disclosure:

No immediate information was available for Orland or Wood.

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CNBC Slideshows:

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*Top Tech Companies:

Google

Apple

Microsoft

IBM

Intel

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Disclaimer

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