The second quarter is now underway but rising stock prices and word that earnings growth may slowing makes market gains in the second half much less likely.

Some sectors are almost guaranteed a strong finish this year. With oil prices moving toward $75 and reports that supply might tighten further, Exxon (NYSE:XOM) and ConocoPhillips (NYSE:COP) will not only have good quarters. They should also have splendid guidance.

The other side of the oil story is grim. Big auto companies including General Motors (NYSE:GM) and Ford (NYSE:F) will come up against a bigger headwind as consumers move to fuel efficient cars, which tend to be marketed by Toyota (NYSE:TM) and Honda (NYSE:HMC). GM and Ford are being upgraded by analysts on the assumption that the UAW will give them cost concessions. But that will not matter much if sales continue to fall.

More oil price fall-out is likely with airlines. Southwest (NYSE:LUV) have said that, even with fuel-hedging, costs for operating the company are moving up and leverage to charge passengers more is moving down.

If oil does continue to move up and interest rates also rise, consumers are likely to view themselves as poorer than they were earlier in the year. At some point this starts to hurt sales at large consumer goods companies like Procter & Gamble (NYSE:PG). The number of customers who will buy a new $20 razor can't grow if consumer spending is not robust.

The largest financial institutions like Goldman Sachs (NYSE:GS) and JP Morgan (NYSE:JPM) are somewhat walled off from mortgage problems. Unless they are buying mortgage instruments, direct loans for homes are off their books. This leaves earnings from lending to private equity interests as their primary engine for growth. Rising interest rates will certainly hurt deal flow and earnings may fall off. Goldman could be particularly vulnerable to a hostile deal environment.

Tech has gone into a schizophrenic period. Some of the aging firms like Microsoft (NASDAQ:MSFT) and Yahoo! (NASDAQ:YHOO) cannot seem to get out of their own ways. Any miss on earnings at these is likely to push shares down. The market darlings, especially Amazon (NASDAQ:AMZN) and Google (NASDAQ:GOOG) will have to put up might impressive numbers to keep their valuations high. That means that cheap tech stocks and expensive tech stocks both need to perform to avoid one set of investors who are already disappointed and another set which are euphoric.

Not much room for error.

Douglas A. McIntyre is a partner at 24/7 Wall St.

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