Knapp believes that the technology, industrials, materials and consumer discretionary sectors will rebound, whereas consumer staples and utilities will fall behind.
- SPDR Technology Select Sector Fund (NYSEArca: XLK)
- Vanguard Industrials Sector ETF (NYSEArca: VIS)
- SPDR Materials Select Sector Fund (NYSEArca: XLB)
- SPDR Consumer Discretionary Select Sector Fund (NYSEArca: XLY)
Still, Goldman Sachs analysts warn that there is little correlation between earnings and stock prices. The firm expects S&P 500 earnings growth to hit 14% this year while the market will still fall 5%, chief investment strategist, David Kostin, said.
“Unfortunately, the unstable macro environment is likely to persist for the foreseeable future because Europe currently lacks both the institutional structure and policy tools to solve the festering sovereign debt crisis,” Kostin added in a report.
SPDR S&P 500 ETF
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Max Chen contributed to this article.