The stock market was mixed-to-down last week, as jobless claims were higher than expected and rates crept up. Riskier assets underperformed blue chips as the former is considered to be more exposed to a rise in interest rates. During Friday's session, The Dow Jones Industrial Average increased 1 points, or 0.00%. The S&P 500 was down 0.19%, and the Nasdaq Composite increased 0.07%. For the week, the DJIA climbed 36 points, or 0.1%, the S&P 500 was down 0.71%, and the Nasdaq Composite was down 1.57%. Year-to-date, the DJIA is up 2.90%, the S&P 500 is up 4.01%, and the Nasdaq Composite is up 7.65%.

The stock market performed well last week, touching fresh highs with no clear-cut catalysts aside from relatively strong earnings. Tech stocks outperformed blue chips, though small-cap stocks outperformed both. During Friday's session, the Dow Jones Industrial Average increased 28 points, or 0.09%. The S&P 500 was up 0.47%, and the Nasdaq Composite increased 0.50%. For the week, the DJIA climbed 310 points, or 1.00%, the S&P 500 climbed 1.23%, and the Nasdaq Composite led the way, climbing 1.73%. Year-to-date, the DJIA is up 2.78%, the S&P 500 is up 4.76%, and the Nasdaq Composite is up 9.37%.

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.

Small- and mid-cap stocks (SMID stocks) surged in the past quarter. They also have outperformed large-caps over the past 12 months and 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 widely distributed and the economy recovers. As well, the prices of SMID stocks are generally lower than the prices of large-caps. While SMID stocks can be risky, diversified investors look to have exposure to small- and mid-caps based on the long-term performance record. We estimate that 20%-25% of the U.S. stock market's capitalization is comprised of SMID stocks. 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. We note that 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.

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.

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.