Investors buying stocks as 'default purchase': Darst

Earning recession, and 'recession recession'

Investors are buying stocks as a default purchase because there really is nowhere else to go in the market, independent investment consultant David Darst said on Friday.

In fact, the United States is in a profits recession, he said, with Wall Street analysts expecting two quarters of declining earnings.

"The last six times you've had a profits recession, we've had a recession recession," Darst said in an interview with "Closing Bell."

Analysts are hoping a second-half recovery will keep 2015 from becoming the worst year for profits since the last recession.

David Darst
Scott Mlyn | CNBC

This year's U.S. profit estimates have plummeted in recent months to 1.7 percent growth thanks to the strong dollar and cuts in forecasts for energy companies, according to Thompson Reuters data.

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If profit across the board comes in at 1.7 percent higher, 2015 would the worst year for companies in the index since 2009, when earnings fell 5.5 percent.

So why is the market up? Darst said it's "acquitting itself well."

"This market is being bought by the same people who are buying Manhattan apartments for $110 million and buying Andy Warhol paintings," he said. "It's a default purchase."

Stocks surged Friday, jumping about 1 percent to close near highs. The Dow Jones industrial average and S&P 500 broke three weeks of consecutive losses to post gains of more than 2 percent for the week.

"The way this market has acted with all the softness to the first quarter is a very good indication of an underlying demand for stocks," Darst said.

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Reuters and CNBC's Evelyn Cheng contributed to this report.