US Markets

There will probably be a pullback, but it won't ruin the bull market, portfolio manager says

Key Points
  • Stocks may head lower, but the bull market won't be derailed, Hennessy Funds' Neil Hennessy told CNBC on Wednesday.
  • The market has already had several pullbacks, and each time it bounces back, he said.
  • He said corporate earnings should push the market higher.
Stocks close near session lows

Stocks may head lower, but they will likely bounce back and go higher, investing expert Neil Hennessy told CNBC on Wednesday.

U.S. equities closed down on Wednesday, with the Dow Jones industrial average falling 138.19 points at 23,271.28 — its lowest close in over three weeks.

However, Hennessy, portfolio manager and chief investment officer at Hennessy Funds, said since 2010 there have been 14 market moves of 5 to 10 percent on the downside — lasting an average of 16 days.

The market has also seen four time frames when it was down between 10 and 20 percent, he noted.

"We're going to probably have a pullback, but will it ruin the bull market? No, because on each and every one of those 18 pullbacks the market snapped back almost twice as quick as it went down and met new highs," Hennessy said in an interview with "Closing Bell."

"With corporate earnings where they are and where cash is and cash flow is, the market is going to continue to go."

Part of the sell-off can also be attributed to the rise in passive investing, he noted.

Once the selling starts in an ETF or funds, it will beget more selling, said Hennessy. However, it will be "quick and over."

Keith Bliss, senior vice president at Cuttone & Company, told "Closing Bell" the market isn't oversold yet and won't be until the Dow gets to 23,000.

"This weakness could continue for some time. I don't think it's the be-all-end-all and real correction that … a lot of people are looking for," he said.