MINNEAPOLIS ( Stockpickr) -- The stock market is enjoying a nice rally as the second quarter comes to an end. A deal to save Greece from default, at least for now, has helped to ease the fear that had been in place for several weeks. With corporate earnings expected to be strong, investors are placing bets early in hopes that profits will outweigh nervous speculation.
I get that investors are worried, but stocks are simply too attractive to ignore. Weakness in the latter half of the second quarter was altogether expected. Sure, there were some scary headlines, including a soft patch in the economy and much too weak employment figures, but for the most part, this market was due for a pause.
Stocks do not go up in a straight line. There are ebbs and flows along the way. We've just experienced a short period of flow to the downside based mainly on speculation of economic weakness. The facts do not support such an argument.
Earnings on the S&P 500 have been strong and show no signs of slowing. The average sell-side analyst estimate for the large company index is $99.76 per share. With the S&P 500 just over 1,300 at the end of June, the index trades for just 13 times current-year estimates. Take a more pessimistic view and assume the index generates $92 in earnings, and it is still cheap at 14.3 times earnings.Related: 5 Stocks Setting Up to Break Out Analysts and strategists both expect S&P 500 earnings to grow by 10% or more in 2012, with the most optimistic view expecting solid 13.4% earnings growth. There is no excess in these prices by any stretch. With interest rates holding at historically low levels and no sign of real inflation dollars can be expected to flow to the stock market eventually driving up prices. Anything can happen along the way, but things are looking good for investors at the moment. I was cautious from the beginning of May to mid-June. Since that time, I have been bullish, expecting an earnings-fueled rally. It looks like that rally has begun. Here's my take on five stocks on my radar as we head into second-quarter earnings season .