Dow Could Trade Above 12,000: Schwab's Sonders

Stocks rose for a second day despite an unexpected rise jobless claims, and news that the ECB would not be increasing its government bond purchases. Thomas Lee, chief U.S. equity strategist at JPMorgan, and Liz Ann Sonders, chief investment strategist at Charles Schwab, shared their market outlooks.

“The story we’re seeing is the U.S. consumer that’s really strengthening,” Lee told CNBC.

“A lot of that is because balance sheets look better, the high-end consumer has a wealth effect and it’s painting a picture of a U.S. recovery gaining a lot of momentum.”

However, Lee said fiscal deficits remain a problem and can hinder the recovery.

“There are unanswered questions about municipal and state finances,” he said. “If we can get comfortable with that, small businesses will start hiring—that’s the big lagging part of the cyclical recovery.”

Sonders' Outlook:

In the meantime, Sonders said the Dow can reach the 12,000 to 12,500 range.

“I think that the QE2 (quantitative easing) announcement is what triggered the rally,” she said. “We have a decent fundamental underpinning that was less obvious a couple months ago, and now becoming more obvious.”

In addition, Sonders said the previous quarter’s robust earnings growth will likely carry the markets into 2011.

Scorecard—What They Said:

  • Lee's Previous Appearance on CNBC (Nov. 19, 2010)
  • Sonders' Previous Appearance on CNBC (Nov. 23, 2010)

More Market Views—Across the Board:

CNBC Data Pages:

CNBC Slideshows:


Thursday's Dow Gainers (as of this writing):


Bank of America

Home Depot




No immediate information was available for Lee or Sonders.