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Power Play: Rebound in the second-half

Pedestrians walk past the New York Stock Exchange in New York.
Michael Nagle | Bloomberg | Getty Images
Pedestrians walk past the New York Stock Exchange in New York.

Stocks are in record territory, with the Dow and S&P 500 setting new intraday highs and the Nasdaq turning positive for 2016.

LPL Financial Investment Strategist and Economist John Canally tells CNBC's "Power Lunch" on Tuesday he sees slow, but steady growth for the second-half.

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"Looking out into the second half of the year, aided by a dollar tailwind, stable oil prices, steady consumer spending, record high household net worth, and a slowing, but still solid labor market, the U.S. economy may grow between 2.0 percent and 2.5 percent," Canally said.

Against this backdrop, Canally sees mid-single digit returns for the S&P 500 this year.

"Stock returns are based on an expected rebound in earnings. We expect the drags that have restrained earnings (falling oil prices and strong U.S. dollar) to subside," Canally said.

The Dow, S&P 500 and Nasdaq are higher during trading.