The stock market is afraid, but there are pockets of strength if you know where to look

By Paul R. La Monica, CNN Business

    (CNN) -- Investors are very nervous about what's next for America's economy, with market fear gauges spiking. But there are still some bright spots for investors seeking companies that may still report healthy earnings even in a further-weakened economy.

The market is grappling with a lot: interest rate hikes to fight soaring inflation, sharply increasing bond yields, worries about Covid shutdowns in China, fears over Russia's invasion of Ukraine and more.

As a result the tech-heavy Nasdaq is in a bear market, having plunged more than 20% in 2022, and the Dow and S&P 500 have each fallen sharply this year as well. The CNN Business Fear & Greed Index, which measures seven gauges of investor sentiment, is in Fear mode and not far from Extreme Fear levels.

So now is the time for investors to find companies that can still thrive in more difficult economic conditions — because profits still matter, even in a correction or bear market. Heck, some would argue that fundamentals are more important now. When the market was in bull mode, the proverbial rising tide lifted all boats.

Take Friday as example of finding diamonds in a rough market. The broader market tanked, with the Dow falling nearly 100 points to extend its 1,063-point plunge Thursday. Yet there were still winners. Booking Holdings and Kellogg gained Thursday after posting strong quarterly results. People are still traveling — and eating cereal. Kellogg rallied again Friday, gaining another 3.5%.

Health insurance giant Cigna was another winner Friday, rising nearly 6% after reporting revenue and profits that topped estimates and an upbeat outlook for the rest of the year.

Collectible figurines maker Funko surged more than 25% Friday after it posted better than expected earnings and sales. The company also announced a round of new investments from a firm led by former News Corp. and Fox executive Peter Chernin. eBay and former Disney CEO Bob Iger also invested in Funko.

Chip maker AMD also bucked the downward trend Friday, gaining more than 1.5% — although it did fall Thursday with the broader market. The company's shares have surged more than 10% this week after the company reported strong sales and earnings as it continues to take market share from the likes of Intel and Nvidia.

Energy stocks are also continuing to hold up well in this tough market, thanks to surging crude prices. Many oil and utility stocks also pay big dividends, which provide stability and comfort to investors in these volatile times.

Utility NRG soared 10% Friday, making it the top gainer in the S&P 500. Oil and gas exploration firm Pioneer Natural Resources rose 5% Friday after posting solid results earlier in the week, and the stock is now trading at a record high.

It goes to show that even in the scariest of times for the markets, there are always opportunities for investors to find stocks that are still worth buying.

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