Small- and mid-cap stocks (SMID stocks) soared in 2019. They have underperformed large-caps over the past 12 months, but still may be in a better position to generate market-beating returns going forward. For one thing, SMID companies tend to focus on domestic markets, so their businesses could be poised to rebound more quickly once COVID-19 vaccines are more widely distributed and the domestic service economy recovers. As well, the prices of SMID stocks generally are lower than the prices of large-caps. That said, SMID stocks can be risky. Still, despite the risks, diversified investors look to have exposure to small- and mid-caps based on the long-term performance record. Investors used to use a $2 billion market-cap threshold to define a small-cap stock and a $10 billion threshold for a mid-cap. The Russell 2000 index now includes numerous companies with market capitalizations above $15 billion. For our purposes, we use a threshold of $20 billion to define a SMID stock.

Stocks rose again on Tuesday morning following the full FDA approval on Monday of the Pfizer/BioNTech coronavirus vaccine. Many believe that full approval will boost vaccination rates, which could help to control the Delta variant and, in turn, support the economic recovery. The Moderna and Johnson & Johnson vaccines are also expected to receive full approval in the coming weeks. On the housing front, the Commerce Department said that U.S. new home sales rose 1.0% to a seasonally adjusted 708,000 units in July, above the Reuters consensus forecast of 700,000. The Dow rose 0.2%, the S&P 0.3%, and the Nasdaq 0.5%. Crude oil traded near $67 per barrel, while gold rose $2 to $1808 per ounce.

Second-quarter earnings announcements are nearly complete, with some 90% of S&P 500 companies having reported. The profit recovery from the depths of the pandemic low in 2Q20 was been swift, with earnings growth of 93% in 2Q21, according to Refinitiv. But earnings do not look good just on a relative basis -- the $53.93 projected to be earned by S&P 500 companies for the second quarter is the highest ever for the index. Investors can now turn their attention to the third quarter, when earnings are expected to rise a still-strong 30% year-over-year. Our analysts are always on the lookout for companies that raise their outlooks during earnings season. Management's ability to "raise guidance" can often be a catalyst to strong returns in the quarters ahead. Here are 20 BUY-rated companies in Argus coverage for which management has raised guidance or increased its outlook during the 2Q21 EPS reporting season.

Stocks were mixed on Tuesday morning as the Senate voted to approve the new $1 trillion infrastructure bill. The Labor Department said that U.S. worker productivity rose at a 2.3% annualized rate in 2Q, down from 4.3% in 1Q and below the Reuters consensus forecast of 3.5% growth. The Dow rose 0.4%, the S&P rose 0.1%, and the Nasdaq fell 0.5%. Crude oil traded near $69 per barrel, while gold rose $2 to $1728 per ounce.

Stocks rose on Thursday morning following new weekly employment data. The Labor Department said that first-time claims for state unemployment benefits fell to 385,000 for the week ended July 31, down from 399,000 a week earlier but slightly above the Bloomberg consensus of 383,000. The Commerce Department reported that the U.S. trade deficit rose 6.7% to a record $75.7 billion in June, driven by a sharp increase in imports. The consensus forecast was $74.1 billion. The Dow rose 0.6%, the S&P 0.5%, and the Nasdaq 0.6%. Crude oil rose to $69 per barrel, while gold traded near $1805 per ounce.

July ended with a bout of selling, but bulls considered it overdue profit-taking after another successful month. Even with Friday's washout, the S&P 500 rose 2.3% in July. That marked six straight months of appreciation for the blue chip index (only January has been negative in 2021) and was the best market month since April.