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Wow, the market is going straight down. While the S&P 500 and most of the broader indexes have rallied hard from the Summer of last year, the sell-off in equities over the last month has been brutal. While the S&P 500 and its tracking exchange traded fund, SPY (NYSEARCA:SPY), is off around 10%, in the last month, market leaders such as Apple (NASDAQ:AAPL) and Citigroup (NYSE:C) are more than 15% off these stock's highs from earlier in the year. Cyclical sectors such as energy and the industrials have sold-off hard as well.

Indeed, starting with the poor jobs reports in mid-April, renewed fears of the European debt crisis with bonds spiking in Spain, and poor economic data from Europe and China, the growth picture has weakened significantly over the last several months.

Still, the U.S. economy continues to expand at 2-2.5%, the major U.S. banks such as Citigroup and JP Morgan (NYSE:JPM) reported strong year-over-year growth in credit and debt card transactions, and the Fed is now actively considering new stimulus measures as well. Even leading European exporters, such as Siemens (SI), have recently reported double digit year-over-year sales growth in the U.S.

While most cyclical sectors, such as the industrials, have sold-off hard over the last several months, I think it's interesting to look at the recent earnings reports of companies with stronger leverage to the U.S. economy and emerging markets that have remained strong.

GE (NYSE:GE) recently reported its strongest quarter since 2008 and raised the company's dividend by 13% in December, and the company currently yields around 4%.

GE recently reported across most of the industrial divisions, and the company reported a nearly 27% rise in year-over-year earnings excluding the sale of the company's stake in a large Turkish bank, Garanti, in early 2010. While GE reported an 11% drop in the company's appliance businesses that are still heavily tied to the housing sector. GE reported a 20% rise in infrastructure orders, with a 29% rise in equipment sales, and an 11% rise in services contracted out. GE reported a 14% overall growth in revenue in the company's industrial segment, and a 11% organic growth within the industrial division.

While GE capital consistently generated more than 50% of the company's revenue during the years of the housing bubble, GE capital has consistently underperformed the company's industrial divisions for some time. GE's infrastructure, aviation, and other industrial businesses grew at the fastest pace since the 2008 crisis, but the company still showed just a mid-single digit overall revenue growth rate for the year.

While, obviously, GE is a cyclical company, the strength across many of the company's industrial divisions showed that GE's businesses are on longer-term contracts than other companies. GE is benefiting fro the continued strong demand for military and commercial aircraft with the company's aviation division. GE is also benefiting from company's and government's long-term energy needs by providing products and services such as more fuel-efficient locomotive engines.

GE trades at around 11x average estimates of next year's likely earnings.

Eaton (NYSE:ETN) is a power management company specializing in electrical equipment and hydraulic systems. Eaton recently raised its guidance for the second time this year in February, and the company raise its dividend by around 10% in February, the fifth consecutive year Eaton has raised the company's dividend by 10% or more. Eaton yields nearly 4% today.

Eaton recently raised the company's guidance from around $4.44 a share to $4.30-$4.70 a share; the company reported an increase in net income year-over-year of 10% and 6.5% year-over-year revenue growth. Eaton had 4% organic sales growth in the first quarter alone, and the company guided to 7.5 revenue growth for 2012, with the company expecting 14% earnings growth this year.

While Eaton reported a nearly 12% drop in the company's electrical products business overseas, that loss was more than offset by a 13% gain in sales from the company's American segment. Eaton also reported strong growth in the company's hydraulic business of 7% even as global hydraulic equipment sales growth slowed to 4%. The company raised its forecast for growth in the hydraulic markets from 4% to 5% for the year. Eaton also reported double-digit growth in its aerospace division, and 7% growth in the company's trucking division, despite slowing growth overseas.

While, obviously, Eaton is a cyclical company, its businesses are on longer-term contracts, and the company offers significant cost savings to companies and governments. Fuel and power costs have stayed high even as the growth outlook has deteriorated, and companies with strong balance sheets and access to cheap capital have continued to be willing to spend on services and products that reduce costs. While Europe and Asia have remained weak, the company's strength in the Americas has more than offset most its slower growth overseas.

Eaton currently trades at nearly 8x an average estimate of next year's likely earnings.

Boeing (NYSE:BA) continues to see strength in the aerospace market as well. While some airline leasing companies have warned of an oversupply of commercial aircraft, the company's recent earnings report showed strong demand for commercial aircraft in the U.S. and abroad. Boeing yields nearly 2.7%, and the company has raised its dividend by 6% each of the last several years.

Boeing recently reported earnings $1.11 a share excluding one-time items, compared with $.78 a share a year ago. The company also reported delivering 138 aircraft in the first quarter, compared with deliveries of 104 aircraft a year ago in the first quarter. Boeing delivered more planes than its rival Airbus, and reported strong demand for its more fuel-efficient 737. The company also reported strong demand from foreign governments for military aircraft it produces, with a 20% year-over-year growth in the company's backlog for this segment of the company's business. Analysts have also grown increasingly optimistic that the company will be able to meet its target of delivering 10 787s a month by late next year.

Boeing is a cyclical company, but demand for commercial and military aircraft has held up strongly over the last couple years. With fuel costs remaining high and interest rates low, governments making long-term plans have not wanted to risk delaying necessary purchases because of short-term growth concerns. Boeing has a strong backlog spanning many years, and the company has consistently reported strong earnings during periods of slower growth over the last several years.

Boeing trades at nearly 12x an average estimate of next year's likely earnings.

To conclude, while the growth outlook continues to deteriorate, not all cyclical companies are created equally. Obviously, construction and real estate markets in many regions remain weak. Still industrial demand for new products and services has held up fairly strongly in many markets. While investing during any market decline is difficult, often the best value is found when fear and pessimism levels are rising.

Source: 3 Oversold Industrials Raising Guidance And Raising Dividends