Closing Bell 7/16/20: Stocks Step Back

Despite encouraging economic news, stocks retreated today as investors worried about the rising COVID-19 caseload across the U.S. We learned retail sales jumped a better-than-expected 7.5% in June, thanks to reopened stores.

But states are responding to the virus' spread by maintaining or increasing restrictions on businesses, which threatens to chip away at any nascent economic recovery. Another 1.3 million Americans filed for first-time unemployment claims last week.

"Initial claims remain stubbornly elevated and, if taken at face value, suggest that the churn in labor markets remains at unprecedented levels," wrote Michael Gapen, U.S. chief economist at Barclays.

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The Dow Jones Industrial Average fell 0.5% to finish Thursday at 26,734.

Don't Sleep on Industrials

It might have been a down day for the market, but one sector held up surprisingly well. Industrials stocks were essentially unchanged Thursday, and a number of individual industrials names in the Dow actually finished the session with gains -- such as 3M (+0.7%) and Caterpillar (+0.2%).

As highly cyclical stocks, industrials are expected to underperform when economic times are tough. But just because the broader sector is down for the year to date, that doesn't mean analysts can't find great blue-chip industrials to buy. And if you're an income investor, you should know that many of the world's most dependable dividend stocks hail from the industrials sector of the market. Indeed, some industrials even count among Wall Street pros' favorite stock picks.

Coming Up Next

Financial stocks will be in focus Friday. You can check out what to expect from BlackRock (BLK), Citizens Financial (CFG) and State Street (STT), and see which other companies are reporting, on our weekly earnings calendar.