The stock market turned "sloppy" last month and will probably remain that way for a while, says Bob Doll, chief equity strategist at Nuveen Asset Management.
The S&P 500 index fell 1.5 percent in July and 2.7 percent last week, its largest weekly drop in more than two years. The index rose 13.84 points, or 0.7 percent, to close Monday at 1,938.99.
"I think the markets acted very, very well until the month of July when it started getting sloppy," Doll told CNBC
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"For years, it feels like, we've been asking the Fed to get a little more GDP, a few more jobs and a little more inflation. And guess what? We're getting all three, and I think the market's saying, 'OK, what's next?'"
GDP soared 4 percent in the first quarter, non-farm payrolls have risen by more than 200,000 for six straight months and consumer prices climbed 2.1 percent in the 12 months through June.
"I don't think we have big downside," Doll said. "That would require down earnings, recession. We're not going to get that, but a period of sloppiness is probably ahead of us."
He recommends large-cap stocks now.
Some investors say fundamentals continue to signal higher stock prices. "The economy overall is moving forward with better-than-expected earnings, and we see an upward bias continuing over the next couple of months," Chad Morganlander, a money manager at Stifel, Nicolaus, told Bloomberg
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