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7 stocks to buy for the second half: Morgan Stanley

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Investors should bet on health-care and utilities stocks to outperform in the second half, according to Morgan Stanley.

"We are certainly worried about pressure on drug pricing, but believe biotechnology in particularly is growing reasonably well for far lower valuation multiples than other parts of the market," Morgan Stanley equity strategist Adam Parker wrote Tuesday in a note to clients.

Parker reiterated overweight ratings on the two sectors and underweight ratings on technology and staples shares. In terms of changes, he downgraded consumer discretionary and financials to equal weight from overweight, upgraded the energy sector to equal weight from underweight and downgraded materials to underweight from equal weight.

Here are seven stocks rated overweight in health care and utilities the firm recommends: