The Technology sector has led the market recovery from the COVID-19 depths of March 2020. Through November 20, the sector was up 31% for the year, compared to a 10% gain for the S&P 500. The Tech sector is the largest in the U.S. market and now accounts for more than 27% of the S&P 500. Over the long term, we expect the Tech sector to benefit from pervasive digitization across the economy, greater acceptance of transformative technologies, and the development of the Internet of Things (IoT): Healthy company and sector fundamentals are also positive. For individual companies, these include high cash levels, low debt, and broad international business exposure. We have an Over-Weight ranking on the Tech sector and think investors should look to allocate up to 30% of their diversified portfolios to the group. Here is how we use our Tech sector ideas from our analysts in our Focus List and Model Portfolios.

Stocks were mixed on Wednesday morning after reaching record levels on Tuesday. On the employment front, first-time claims for state unemployment benefits rose to 778,000 for the week ended November 21, up from 748,000 a week earlier and above the Bloomberg consensus forecast of 730,000. Core capital goods orders excluding aircraft rose 0.7% in October, down from 1.9% in September but above the consensus forecast of 0.5% growth. The Dow fell 0.6%, the S&P fell 0.3%, and the Nasdaq rose 0.1%. Crude oil traded near $45 per barrel, while gold rose $5 to $1809 per ounce.

This pick list highlights constituents of the Morningstar US Large Cap Index that we believe offer investors the best risk-adjusted return prospects. Stocks of large-cap companies where neither growth nor value characteristics predominate. Stocks in the top 70% of the capitalization of the U.S. equity market are defined as large cap.

In the past few weeks, the S&P 500 has drifted down from its October closing high of 3,534 on 10/12/20, hit an end-of-day low of 3,427 on 10/19/20, and worked back up to 3,465 at the close on October 23. The market is down about 2% from that mid-October high but still up 3% for the month, coming off September's 4% decline.

Stocks rose on Tuesday morning amid hopes for a resolution of the fiscal stimulus stalemate, as House Speaker Nancy Pelosi set Tuesday as the deadline for any pre-election deal with Senate Republicans. Meanwhile, the Justice Department filed a major antitrust lawsuit against Google, and the Commerce Department reported new housing market data. Housing starts for single-family homes rose a strong 8.5% in September, to an annualized 1.108 million units, while starts for multi-family housing fell 16.3% to an annualized 307,000 units. The Dow rose 0.4%, the S&P 0.4%, and the Nasdaq 0.1%. Crude oil traded near $40.50 per barrel, while gold rose $2 to $1913 per ounce.

Stocks rose on Thursday morning following new employment data and reports that the White House and Congressional Democrats had resumed fiscal stimulus negotiations. The Labor Department said that initial claims for state unemployment benefits totaled 840,000 for the week ended October 3, down from 849,000 a week earlier but above the Bloomberg consensus forecast of 820,000. First-time claims have now held below 1 million for six straight weeks, but have not fallen below 800,000 since the start of the pandemic. The Dow rose 0.4%, the S&P 0.6%, and the Nasdaq 0.5%. Crude oil traded near $41 per barrel, while gold rose slightly $1891 per ounce.

This pick list highlights constituents of the Morningstar US Large Cap Index that we believe offer investors the best risk-adjusted return prospects. Stocks of large-cap companies where neither growth nor value characteristics predominate. Stocks in the top 70% of the capitalization of the U.S. equity market are defined as large cap.

Stocks rose on Friday, finishing off a strong week that saw major indexes climb higher. Riskier equities outperformed blue chips, a trend that was commonplace during the early weeks of the recovery. On Friday, the Dow Jones Industrial Average gained 162 points, or 0.6%. The S&P 500 was up 0.7% and the Nasdaq Composite was up 0.6%. For the full week, the Dow was up 2.6%, the S&P 500 was up 3.3% and the Nasdaq gained 3.4%. Year-to-date, the DJIA crossed into positive territory this week, and is up 0.4%, the S&P is up 8.6%, and the Nasdaq is up 30.4%. Over the past 52 weeks, the Dow is up 8.5%, the S&P 500 is up 19.9%, and the Nasdaq is up 46.9%.

Stocks fell on Tuesday morning as investors weighed another round of earnings reports and prospects for a new coronavirus relief package on Capitol Hill. Among other measures, the Republican proposal calls for a sharp cut in extra employment benefits to $200 per week, while Democrats are seeking to preserve the current benefit of $600 per week. The extra benefit will run out at the end of this month. On the earnings front, McDonald's shares fell 2% after the company reported sharply lower 2Q revenue and earnings, while 3M dropped 5% after it missed 2Q consensus estimates and did not reinstate its full-year guidance. The Dow fell 0.4%, the S&P 0.1%, and the Nasdaq 0.3%. Crude oil traded near $41 per barrel, while gold rose $15 to $1946 per ounce.

The stock market went back and forth in the trading week ended July 17, as investors were alternately concerned about the rising tide of daily coronavirus infections and surprised by the strength of economic data (retail sales, housing starts, industrial production, etc.). Now, earnings season is in full swing. A robust week of earnings reports used to mean quite a bit, before there was a pandemic. By the end of it all, investors will know if last quarter's EPS and this quarter's (limited) guidance still mean something.

This pick list highlights constituents of the Morningstar US Large Cap Index that we believe offer investors the best risk-adjusted return prospects. Stocks of large-cap companies where neither growth nor value characteristics predominate. Stocks in the top 70% of the capitalization of the U.S. equity market are defined as large cap.

The major market indices are having a strong second quarter, with gains for the S&P 500, Dow Jones Industrial Average and Nasdaq Composite ranging from 18%-30%. Growth stocks are outperforming value, as the Russell 1000 Growth Index is up 28% compared to the Russell 1000 Growth Index's gain of 13%. Small-caps have outperformed, with the Russell 2000 rising approximately 25%. Industrialized international stocks underperformed domestic stocks, as the EAFE Index increased 15% while the MSCI Emerging Markets Index advanced a stronger 20%. Within the Argus Universe, the Top 5 and Bottom 5 performers were as follows.

This pick list highlights constituents of the Morningstar US Mid Cap Index that we believe offer investors the best risk-adjusted return prospects. The market capitalization range for U.S. mid-caps typically falls between $1 billion and $8 billion and represents 20% of the total capitalization of the U.S. equity market.

Last week, after reviewing insider-trading data from Vickers Stock Research, we noted a surprisingly bullish bounce from corporate executives, directors and beneficial owners. With earnings season winding down, we expected a neutral tone from insiders based on the trend in place heading into earnings season. But that was not to be, as insiders proved to be buying shares as often as they were selling shares (with the historical norm being that they sell 2.0- to 2.5-time more often than they buy). We cautioned, however, that one week does not make a trend -- and that has proven to be true.

This pick list highlights constituents of the Morningstar US Mid Cap Index that we believe offer investors the best risk-adjusted return prospects. The market capitalization range for U.S. mid-caps typically falls between $1 billion and $8 billion and represents 20% of the total capitalization of the U.S. equity market.