Stock selloff creates bargain blue chips

By Economic IndicatorsFOXBusiness

U.S. stocks went through a major drubbing this week, with the Dow Jones Industrial Average and the S&P 500 entering correction territory.

While stocks have slid, many analysts have maintained their view that the markets will return to the upside, adding that the recent drop has created a buying opportunity.

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Commenting on the recent sell-off, Wells Fargo’s Investment Institute said “downside volatility represents opportunity. Be more nimble. Pick your spots and put sidelined funds to work.”

Mary Ryan, a senior equity options strategist at E*TRADE, told FOX Business earlier in the week that the sell-off has created an opportunity to buy many stocks at November prices.

Ken Langone, chairman of Invemed Associates chairman and founder and Home Depot co-founder told FOX Business’ Maria Bartiromo on “Mornings with Maria,” that he is a very long-term investor, that stocks go up and stocks go down and that he stays focused on the underlying business.

When Bartiromo asked him what businesses he sees growth in right now, he said Home Depot (NYSE:HD) and basic industries. He gave the example of Caterpillar (NYSE:CAT), if infrastructure spending goes through, and Deere & Company. (NYSE:DE).

Caterpillar’s shares have been trending consistently higher since January 2016, climbing from about $60 per share all the way up to $170 at the beginning of the year.

If $170 was too steep of a price for an investor, as of Friday, shares had retreated significantly and have returned to their December price levels.

Deere shares retreated a bit during the recent sell-off, and for investors interested in buying the dip, they can purchase Deere at its mid-December price point. Earlier this year, Deere stock peaked at a record high.

Home Depot’s shares rallied to a record high above $200 earlier this year, and the sell-off brought them down to their November price levels.

Other companies that have taken a big hit from the sell-off include Procter & Gamble (NYSE:PG) and Exxon Mobil (NYSE:XOM).

Exxon Mobil had started to gain some traction this year, but the company took a hit during the recent market sell-off, with shares retreating to their September price level. The move comes as investors are starting to warm up to energy stocks following the rebound in oil prices.

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Procter & Gamble has been especially hard hit from the recent sell-off, with shares retreating to their early 2016 price levels as of Friday.

Adding his thoughts to the recent sell-off, Hank Smith, co-chief investment officer at Haverford Trust, said “Despite the recent sell-off that put the markets in correction territory for the first time in two years, the fundamental backdrop is unchanged and paints a favorable environment for equities. This correction feels that much worse because of how long it’s been since our last correction.”