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Election and oil prices making investors cautious, Art Cashin says

Investors looking for clarity are keeping the U.S. stock market trading in a narrow range, widely followed trader Art Cashin told CNBC on Thursday.

"Between the election and oil, people I think are being cautious," the director of floor operations for UBS said in an interview with "Closing Bell."

Stocks closed lower Thursday, with the Dow Jones industrial average ending down about 40 points at 18,162.35.

While jittery investors may be sitting on the sidelines right now, there is still money to be made based on two key fundamentals, Loomis, Sayles & Company portfolio manager David Sowerby said.

For one, corporate cash flow is above average, he said. Plus, market sentiment is still lukewarm, with many neutral or bearish.

"Corporate cash flow and sentiment makes me want to still have more tilt to offense in portfolios — in stocks and higher yielding credit — than to be too defensive, even in the face of lousy politics," he told "Closing Bell."

One area of concern for investors is a possible Democratic sweep on Election Day, with Hillary Clinton winning the White House and the party taking control of Congress.

Cashin said if that were to happen, the banks and financials may have difficultly because Sen. Bernie Sanders and Sen. Elizabeth Warren would probably put pressure on Clinton to make some moves. Pharma could also have some issues since it has been under fire for rising drug prices, he added.

However, he said right now the market doesn't think a sweep will happen.

"They think that the Republicans will hold at least the House and that will make for somewhat continued gridlock. So neither side will get a chance to implement any sweeping policy changes," said Cashin.

Meanwhile, David Katz, chief investment officer at Matrix Asset Advisors, has his eye on financials. While it is one of the cheapest areas of the market, its business has been good, he told "Closing Bell."

"They've having a very good earnings reporting season and they are all making a great deal of money even with zero interest rates. If rates ever start to go up, we think the financials can go that much higher," he said.

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