Market Rebound: 'Earnings Have Really Driven Stocks'

Despite the recent stock pullback, corporate earnings are expected to continue giving the market some short-term momentum.

“There’s a huge tug of war between Europe and earnings and right now, earnings are winning,” said Burt White, CIO of LPL Financial on CNBC's Power Lunch.


Stocks spiked sharply Tuesday, logging their strongest rally in a month, boosted by a handful of positive earnings reports from heavyweights such as Goldman Sachs , Johnson & Johnson and Coca-Cola. (Click here to track the results.)

Eighty-six of the S&P 500 companies are scheduled to report earnings this week, marking the first heavy earnings week of the season. Abbott Labs , BlackRock , Ebay and Yum Brands are scheduled to post results on Wednesday.

“Two weeks after report, earnings have really driven stock prices and we’re sitting right in the middle of that,” White explained. “Eleven of the last 12 quarters we’ve seen positive gains for the market in the two weeks after Alcoa —we’re only five days post, so we have another week of this going.”

Some experts extended their bullish views, saying they expect a favorable environment for equities to last for the rest of the year.

“I do think this market moves substantially higher over the course of the next year,” said Carmine Grigoli, chief investment strategist at Mizuho Securities. “Earnings will rise by 8 to 10 percent, you also have an increased appetite by the corporate sector…and the valuations of the equity market relative to interest rates have not been this low in over 50 years, so what’s not to like?”

And Joe Bell, senior equities analyst at Schaeffer's Investment Research has a 1,525 year-end price target on the S&P 500.

“The strong price action, coupled with decline expectations and the overall negative market sentiment is all going to be a positive for stocks going forward," he said.

But a handful of tepid economic news, ongoing euro zone debt woes and worries over a soft landing in China prompted a selloff in the last two weeks, leaving investors to wonder whether a bigger correction is on the horizon.

While stocks are taking a pause from the pullback, some experts say the global worries will continue to spook the markets for the foreseeable future.

As a result, Todd Schoenberger, managing principal of The BlackBay Group said he remains bearish.

“Going forward, housing is going to be bad, jobs growth is going to be disappointing and so the poison is still there for investors,” he said. “I predict we’re going to finish lower for the year.”

Follow JeeYeon Park on Twitter: @JeeYeonParkCNBC