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Analyst Watch: Machinery, Mega Caps, Las Vegas Sands

US stock index futures pushed higher Wednesday, after stocks closed lower Tuesday as a result of weak housing data.

Investors will focus on an announcement in the afternoon from the Federal Reserve, following its two-day meeting on monetary policy, with many analysts saying that rates will remain at record lows for a long time.

Meanwhile, here's what guests on today's Squawk on the Street are watching before the opening bell:

Big Machinery and Technology

Kim Caughey, vice president and senior equity analyst and assistant portfolio manager for Fort Pitt Capital Group, says the firm estimates S&P 500 earnings for 2010 in the $75-$77 range, which is below current consensus.

"We don't see the economy gaining much steam, but earnings remain strong due to the lean structure," Caughey says.

So what stocks and sectors does she like?

"We like two areas that we think America excels at: big machinery and technology. They are great for export — both are enablers of productivity," she says.

Specific stocks the firm likes:

  • Joy Global
  • Intel

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Mega Caps

James Dailey, CIO and senior portfolio manager for Team Asset Strategy Fund, says the firm sees the US economy slowing considerably during the second half of 2010 and becoming increasingly vulnerable to another recession in 2011.

"We do not believe that the stock market is pricing in this risk," Dailey says. "The stock market is likely to be in the process of forming a cyclical peak, which often takes months to unfold, as it did in 2007."

As such, the firm likes high-quality mega cap stocks that pay significant dividends. Specifically, the firm owns:

  • Merck
  • Verizon
  • AT&T common stock
  • Microsoft (July 25 call position)

"High-quality stocks have lagged badly over the past year, and we believe that a slower growing economy will make their more stable and conservative profile more attractive for investors and be the beneficiary of a market rotation out of riskier segments," Dailey says.

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Las Vegas Sands

David Bain, managing director and gaming analyst for Sterne, Agee & Leach, says the firm upgraded Las Vegas Sands to buy in September, 2009 on the belief that the upside was too large to ignore.

Since then, LVS has increased more than 60 percent. The stock is one of the most actively traded on the NYSE this week, and Bain says he sees the opening of a new casino in Singapore as a continued bullish sign for the stock.

See more of what these and other analysts and money managers have to say, and get the latest financial news. Watch Squawk on the Street every weekday morning starting at 9 a.m. ET.

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