Expect Dow 11,500-13,000 This Summer: Strategist

Markets are digesting mixed economic data over weakness in the jobs market, retail and government efforts to hold bailed-out bankers accountable. Will stocks prove to be resilient and go higher? Paul Schatz, president of Heritage Capital, and Andrew Kanaly, chairman of Kanaly Trust Company, weighed in.

Earnings, Economic Data & the Markets
Earnings, Economic Data & the Markets   

“The market’s setting up for a very routine, healthy, normal pullback of 4 to 7 percent,” Schatz told CNBC.

“Maybe we have a percent or two left on the upside in the next week to 10 days.”

Schatz said he expects markets to pull back up to 7 percent into late February before the rallying into the summer.

“We’ll get to Dow 11,500 to 13,000,” he said. “It will be fairly broad-based—semiconductors, energy services and I like utilities—a lot of sectors are going to participate in that last rally.”

However, Schatz told investors to avoid financials.

In the meantime, Kanaly said he expects to see some positive follow through in the markets during the first half of the year on last year's stimulus and positive economic news left to come.

“But when we start looking into 2011, it’s dark clouds and we’re going to have a really tough market in the second half of this year,” he warned.

Schatz Likes:

S&P Utilities

S&P Materials

PHLX Semicond

Kanaly Likes:

S&P Technology

S&P Materials

S&P Energy

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Financials — Point/Counterpoint:

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More Market Opinions:

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CNBC Slideshows:

  • Cramer's 12 Stocks to Play the Recovery

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CNBC Data Pages:

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Top Materials Firms:

Alcoa

United States Steel

Dow Chemical

DuPont

Freeport-McMoRan

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Disclosures:

No immediate information was available for Kanaly or Schatz.

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Disclaimer