'More Defensive'

"We are at a stage of the recovery now where a more balanced mix of sector leadership is likely to emerge," said Jeff Palma, a strategist at UBS AG in New York. "Numbers are not as strong as we're used to, but we think it will be sustainable. If you've been pushing a very cyclical strategy, then it is time to become a little bit more defensive."

Palma expects the S&P 500 will end 2011 higher than last week's close and advises holding more technology, health-care and phone stocks than are represented in indexes. UBS raised its per-share profit forecast for the equity index last week to $101 from $96.

The advance since the S&P 500's 2011 bottom on March 16 has been led by companies whose earnings are least-dependent on economic growth. Health-care stocks such as Johnson & Johnson have the biggest increase among 10 industries at 14 percent. The household-product group including Procter & Gamble Co. climbed 12 percent, phone companies like AT&T Inc. gained 12 percent and utilities such as Southern Co. rallied 11 percent.

Before March 16, those groups had the four smallest returns of the bull market.

'Playing Catch-Up'

Laszlo Birinyi, president of Westfield, Connecticut-based money-management and research firm Birinyi Associates Inc., said higher estimates from securities analysts show they are "playing catch-up," and aren't a bullish signal. The 67-year- old former head of Salomon Brothers Inc.'s equity desk said he's still buying shares after being one of the first to advise clients to own stocks as the market bottomed in March 2009.

"The earnings outlook is good and the earnings have been good because companies have taken advantage over the past several years to restructure and realign themselves," Birinyi said. "I'm still bullish and I want our clients and investors to realize this is a protracted, long bull market. Don't get shaken out by the 3 percent or 4 percent declines."

Salesforce.com Inc. in San Francisco, the largest supplier of online customer-management software, Denver-based Chipotle Mexican Grill Inc., the burrito chain spun off by McDonald's Corp., and Paris-based Hermes International, the maker of Birkin handbags, are among stocks Birinyi recommends.

Drugmakers, Utilities