Following last week's surge of the Dow Jones Industrial Average and the S&P 500, BlackRock’s Chief Equity Strategist Bob Doll still expects equity stocks to continue to shine.

The United States has seen improvements in unemployment claims, manufacturing data, capital expenditures and other barometers. Doll’s main concern is the movement of Saudi military forces in Bahrain and the risk that unrest within Saudia Arabia or a disruption in oil supplies could trigger an oil price spike.

Doll judges that oil already has a risk premium of “somewhere around $20 a barrel built into the current price."

A major disruption in actual supplies in Saudi Arabia (or elsewhere) could push oil prices back to their record levels of around $150 a barrel. If oil prices reached that level and remained there for some time, it would certainly represent a serious threat to global economic growth, but this is a hypothetical situation that we believe is unlikely to play out.”

“The recent selloff was more a matter of risk aversion, hedging and position covering than it was an actual shift in broader investor sentiment from bullish to bearish,” Doll wrote in today’s commentary, noting that, from peak to trough, stocks fell around 7% (with the S&P 500 hitting a low of 1,250) and have since recovered 5% of their value. “Future gains may be more uneven than they were toward the end of last year and early in 2011. Nevertheless, we continue to believe that stocks (and US stocks in particular) should remain a preferred asset class.”