In the trading week that ended on October 30, the stock market had its most serious stumble since the early weeks of the pandemic. Earnings and economic news was generally positive, including the record 33% recovery in 3Q20 GDP. But the combination of sharply rising COVID-19 cases and prospects for an inconclusive and contested election spooked investors heading into Halloween.

Stocks gave up early gains on Wednesday morning amid mixed earnings reports, as investors awaited new developments in the fiscal stimulus talks. Verizon posted better-than-expected adjusted 3Q earnings and raised its full-year guidance, but missed the consensus revenue estimate. Abbott Labs, which received approval for its rapid COVID-19 test in August, reported stronger-than-expected 3Q revenue and earnings and boosted its full-year guidance. The Dow fell 0.3%, the S&P 0.2%, and the Nasdaq 0.2%. Crude oil traded near $40 per barrel, while gold rose $18 to $1933 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.

The 2Q20 EPS season is in the record books, and the results were not pretty. Through late August, Refinitiv reported that S&P 500 earnings declined at a 30.5% rate. The Industrial and Energy groups were the weakest performers, while the defensive Utilities and Healthcare sectors were the strongest, up in the mid-single digits. The Tech sector's earnings increased 3%. 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. There were not many in this most-recent period. Here are 12 BUY-rated companies in Argus Coverage for which management has raised guidance or increased its outlook during the recent EPS reporting season.

The S&P 500 wrapped up its best August since 1986, when the index gained 7.1%. Investors everywhere are touting 1986's epic performance; fewer have mentioned that in September 1986, the index slumped 8.5%.