Closing Bell 7/16/20: Stocks Step Back

Rising cases of coronavirus across the U.S. and elevated first-time unemployment claims weighed on the market.

(Image credit: Getty Images)

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.

Dan Burrows
Senior Investing Writer,

Dan Burrows is Kiplinger's senior investing writer, having joined the august publication full time in 2016.

A long-time financial journalist, Dan is a veteran of SmartMoney, MarketWatch, CBS MoneyWatch, InvestorPlace and DailyFinance. He has written for The Wall Street Journal, Bloomberg, Consumer Reports, Senior Executive and Boston magazine, and his stories have appeared in the New York Daily News, the San Jose Mercury News and Investor's Business Daily, among other publications. As a senior writer at AOL's DailyFinance, Dan reported market news from the floor of the New York Stock Exchange and hosted a weekly video segment on equities.

Once upon a time – before his days as a financial reporter and assistant financial editor at legendary fashion trade paper Women's Wear Daily – Dan worked for Spy magazine, scribbled away at Time Inc. and contributed to Maxim magazine back when lad mags were a thing. He's also written for Esquire magazine's Dubious Achievements Awards.

In his current role at Kiplinger, Dan writes about equities, fixed income, currencies, commodities, funds, macroeconomics, demographics, real estate, cost of living indexes and more.

Dan holds a bachelor's degree from Oberlin College and a master's degree from Columbia University.

Disclosure: Dan does not trade stocks or other securities. Rather, he dollar-cost averages into cheap funds and index funds and holds them forever in tax-advantaged accounts.