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Power Play: Why energy will be a drag on earnings

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Earnings season is underway, with some of the larger banks reporting this week.

Bill Stone, chief investment strategist at PNC Asset Management, tells CNBC's "Power Lunch" on Tuesday the energy sector is set to remain the biggest drag on earnings, offsetting growth from almost all other sectors.

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"With oil prices almost 45 percent lower compared to last year (second-quarter West Texas Intermediate average of $58 in 2015 versus $103 in 2014), the energy sector is expected to post an earnings decline of 60 percent for the second quarter," Stone said.

Because of the disconnect between oil prices and the domestic economy, Stone believes it is prudent to evaluate results excluding energy, estimated at one percent for earnings and flat for sales.

The "strongest growth is expected from health care, 9.1 percent; information technology, 5.3 percent; and telecommunications services, 3.5 percent. [The] weakest revenue growth is expected from energy at -37.3 percent, followed not surprisingly by materials at -5.7 percent and utilities at -4.2 percent," Stone said.

WTI and Brent are up one percent during trading.