Approach Markets 'Chicken-Like': Bob Doll
Web Producer, CNBC.com
Investors are playing the markets carefully during these volatile conditions but stocks will resume their way up once the wave of international bad news subsides, Robert Doll, BlackRock vice chairman, told CNBC Wednesday.
Data regarding consumer confidence, earnings and private sector wages are better in the US "but you've got the headlines," Doll said.
"Certainly with hindsight selling in May was a good idea," he said. "These are trickier times, I think a more chicken-like, gingerly approach makes sense."
BP shares plunged Tuesday, dragging markets with them, as there was no sign the company can contain the oil gushing from a well that ruptured in April, while Israel's attack on a convoy of ships trying to force the blockade on Gaza sparked fears of heightened tensions in the Middle East.
"I think when the dust settles, economic growth will permit the market to move higher," Doll said.
He is buying cyclical stocks, which have lost some value during the market weakness, then will add some defensive shares.
"I'm not buying anything with both hands, maybe one hand… and energy, yes," Doll said.
He is buying stocks in the energy, industrials and materials sectors and some defensive ones such as healthcare and technology. Doll is maintaining his underweight position on financials.
Integrated energy companies have "pretty good balance sheets" and "pretty good cash flow," he said, adding that he was buying Marathon but also Chevron .
The BP oil spill is going to cause a political backlash and the Obama administration, who was ready to allow offshore drilling, will have second thoughts, Doll said, explaining why he prefers integrated energy firms.
"I may be a chicken playing it through the integrateds, but that's me," he said.
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Disclosure information was not available for Robert Doll or his company.