NEW YORK (MarketWatch) -- As stock investors hunt for higher returns in light of what some call a "new normal" of reduced expectations, analysts point to increased demand for goods from China and other emerging markets as a logical approach.

If the U.S. economy is coming into a sustainable recovery, even with lower growth rates, it follows that the outlook bodes well for stocks in those sectors in which businesses spend -- namely, technology, basic materials and industrials, said Doug Lockwood, chief investment officer at Cornerstone Wealth Management.

Demand will come "not just from our U.S. economy, but from a lot of these emerging markets that will need more than they can produce in their own country," the adviser said.

"There's a huge list of companies that have a large multinational footprint that were helped by the declining dollar and surging demand, particularly from Southeast Asia," said Fred Dickson, chief market strategist at Davidson Cos.

Early in the current reporting season, companies including blue chips Intel Corp. and Johnson & Johnson reported "terrific results" in large measure because of increased demand from emerging markets, said Dickson.

Dickson also lists IBM , General Electric Co. and Google Inc. , and Alcoa Inc. as among the beneficiaries of the trend.

China has rapidly invested stimulus money into rebuilding the country's infrastructure, with their industrial production numbers up about 10% year-over-year, Dickson said.

"The massive amount of dollars they've poured into consumer and corporate development request a lot of products, and we are still a large exporter of products into that part of the world," said the analyst.

New normal

Companies with large financing operations in Southeast Asia have also reported gains from their international exposure, including Bank of America Corp. , Citigroup Inc. , J.P. Morgan Chase and Goldman Sachs Group Inc. , said Dickson.

Also illustrating the scenario, the chairman of Emerson Electric Co. on Friday reportedly said the industrial conglomerate expects emerging markets including China, India and Southeast Asia to make up for as much as 45% of its sales within five years.

On Wall Street, the major benchmarks retreated sharply, reversing course after their biggest single-day jump in more than three months. Financials shares were hardest hit in the face of a possible bankruptcy by commercial lender CIT Group Inc. . Read full report.

The Dow Jones Industrial Average fell 249.85 points, or 2.5%, to end at 9,712.73, leaving it off 2.6% for the week and effectively flat for October. The hit was the worst single-day point drop for the blue chips since April 20.

The two other major indexes snapped seven-month winning streaks. The S&P 500 Index dropped 29.92 points, or 2.8%, to 1,036.19, a weekly loss of 4% and a 2% monthly decline. The Nasdaq Composite slumped 52.44 points, or 2.5%, to 2,045.11, down 5.1% from the week-ago close and off 3.6% for the month.

The average rate of return in any rolling 20-year period stands at around 11%, but investors would be wise to curb their expectations, said Lockwood.

"We're in a bit of a new normal when it comes to investing, and that type of growth rate is probably not possible going forward. You may not want to plan your retirement based on the same appreciation rates as the historical average," Lockwood says.

"You may have to work longer and save a little more, those are the things I think investors should be thinking through," he adds.