The industrial sector is highly cyclical, so the fear of a recession tends to send stocks here, like Stanley Black & Decker (NYSE: SWK), lower. In fact, the Industrial Select Sector SPDR Fund is down around 9% so far in 2022. But Stanley Black & Decker is off even more, with the stock losing nearly 50% of its value. What's going on here?

The economy swings between growth and contraction. And based on human nature, that's unlikely ever to change. Recessions, as contractions are called, can be particularly hard on industrial stocks. In general, these companies sell products to other companies. When end demand falls, the impact quickly travels right up the supply chain.

And there's often an extra hit in the industrial space because businesses tend to pull back on big capital spending projects when times are tough. Investment generally doesn't pick back up until there's clear end-market demand again.

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Source Fool.com