CNBC Stock Blog

Get Ready for Second-Half Profit Taking: Strategists

With U.S. stock markets ready to close out their best week in nearly a year, Darin Richards, chief investment officer at AKT Wealth Advisors, told CNBC "I don't think the momentum will continue."

He projects the Standard & Poor's 500 to end the year at 1400 to 1450; at what exact point depends on how good are second-quarter company earnings.

"If those look strong again I think 1450 is definitely within reach," he said Friday. "If not, the 1400 a little more conservative. I think you’ll see a little more slow [and] steady as opposed to this fantastic week we've had."

His stock picks for the second half are large-caps, particularly in health care and technology. "Health care’s the best sector this year after being beaten down for several years in a row," Richards explained. "We're seeing a little bit of move away from the cyclicals, and I think tech clearly looks like the most attractive if you have to pick one sector."

He likes Intel and Hewlett-Packard because they have "tons of cash,  fantastic balance sheets and global operations. Even if we see a slowdown, they're in a good position."

In the same interview, Frederic Dickson, senior vice president at D.A. Davidson, said that after this week's gain, "profit taking seems to be inevitable. We’re not looking for much. The market is exhibiting classic mid-cycle behavior. We expect some softness in the economy. We expect surges and dips in the market."

He also expects cyclical stocks in the technology, energy and industrial materials sectors to do well in the second half.

"We’d stay with U.S. dividend achievers," he said. "We say stick with those stocks" that have  yields greater than the five-year Treasury yields, currently at about 1.65%. 


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Disclosure information was not available for Darin Richards and Frederic Dickson or their companies.