BlackRock Sees Stocks Rising in 2011

NEW YORK ( TheStreet) -- Equity markets will experience a solid recovery with sustainable growth in 2011, said BlackRock's ( BLK) chief equity strategist Bob Doll on Monday.

Doll said stocks in the Standard & Poor's 500 are likely to see a double-digit increase in returns as earnings rebound, while a possible rise in short-term interest rates will dampen fixed income investments.

"Three-year strings of double-digit growth are not common. We think earnings will exceed the prior peak of $91.47 operating earnings per share," Doll explained during a presentation in New York City.

Doll added that corporate earnings are likely to reach $100 to $110 per share by the middle of 2011. Share prices won't be the only high point, as $2 trillion in cash on corporate balance sheets will likely be used to lead significant increases in dividends, share buybacks and mergers and acquisitions.

Doll says that the preferred sectors for investing for growth are energy, healthcare and telecommunications. Meanwhile, sectors to steer clear of in 2011 are the financials and consumer staples.

"The asset quality for financials are improving. They are clearing off bad assets on balance sheets, but what is their revenue growth going to come from?" asked Doll. "The growth will likely come from the release of loan loss reserves. The sector is going to redefine itself and consolidate this year."

--Written by Maria Woehr in New York.

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