The stock market moved lower last week, with tech stocks relatively outperforming blue chips, though both were off. During Friday's session, the Dow Jones Industrial Average fell 272 points, or 0.78%. The S&P 500 was down 0.77%, and the Nasdaq Composite was down 0.87%. For the week, the DJIA was down 761 points, or 2.15%, the S&P 500 was down 1.69%, and the Nasdaq Composite was down 1.61%. Year-to-date, the DJIA is up 13.07%, the S&P 500 is up 18.70%, and the Nasdaq Composite is up 17.28%.

This edition features edge computing; utilities' role in green energy; AIG's valuation; and notes from RH, SEI Investments, and Lululemon.

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 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 were mostly lower on Friday morning following a weaker-than-expected August employment report. The Labor Department said that the U.S. added just 235,000 payroll jobs in August, down from a revised 1.053 million in July and well below the Reuters consensus forecast of 728,000. The official unemployment rate fell to 5.2%, down from 5.4% in July. The Dow fell 0.2%, the S&P fell 0.1%, and the Nasdaq rose 0.1%. Crude oil traded near $70 per barrel, while gold rose $22 to $1833 per ounce.

Stocks rose on Monday morning, led by the Technology and Consumer Discretionary sectors, on continued optimism that the Fed would be cautious and measured in tapering bond purchases. On the housing front, sales contracts for previously owned homes declined for a second month. The National Association of Realtors said that its pending home sales index fell 1.8% in July after a decline of 2.0% in June. The Reuters consensus had called for an increase of 0.4%. The Dow rose 0.1%, the S&P 0.5%, and the Nasdaq 0.9%. Crude oil held steady near $69 per barrel, while gold traded near $1816 per ounce.

Value stocks are outperforming growth in 2021 (for the first time since 2016), though a recent rally in growth stocks has narrowed the performance advantage for value. But in an environment of historically low interest rates, many investors are still searching for high levels of income, which often can be found in value stocks. During recent years, the performance record has favored growth. Since 2010, the Russell 1000 Growth Index has climbed more than 450%, compared to an advance of 180% for the Russell 1000 Value Index. In eight of the past 10 years, growth stocks have topped value stocks. That hasn't always been the case. In the previous decade, including the Great Recession, value stocks were better performers than growth stocks, advancing an admittedly low 8%, but still better than growth, which declined 15% during the decade. Value investors trace their roots to the famous "Security Analysis" textbook, written by Ben Graham, an economics professor at Columbia University. Warren Buffett was one of his students. The tide may now be turning. Progress on COVID-19 vaccines has given a lift to some of the cyclical companies (energy companies and banks) that have lagged in recent quarters, and value stocks have kept pace with growth stocks in the past year. In any event, value is the place to achieve income. The current yield on the iShares Russell 1000 Value Index ETF is 1.6%, compared to the 0.5% current yield on the iShares Russell 1000 Growth Index ETF. This is important, as the current yield on the 10-year Treasury bond is 1.30%. For our list this week, we have screened our coverage universe for stocks that are BUY-rated by Argus Research analysts, have an Argus Financial Strength rating of at least Medium, and have a yield of 3.0% or higher. New stocks in our portfolio include the following.

The energy mix for U.S. power production continues to turn green, according to the U.S. Energy Information Administration. Coal was at one time the undisputed king. In the mid-1990s, coal accounted for more than 50% of domestic electricity generation. That percentage fell to 45% at the end of the last decade and dropped to 19% in 2020. Meanwhile, natural gas, benefiting from increased supply and lower prices, accounted for 40% of total generation, up from 15% in the mid-1990s. Nuclear generation accounted for 20% of generation last year (stable for the past 20 years) and renewables accounted for 20%, up from 15% in 2016 and less than 5% two decades ago. Drilling down into renewables, wind was the leading source, accounting for 8.4% of total electricity generation in 2020, followed by hydropower (7.3%), solar (2.3%), biomass (1.4%), and geothermal (0.4%). Looking ahead, the Biden Administration is focused on promoting clean energy sources. As such, we expect the decades-long downtrend for coal to remain intact, with continued market share growth for natural gas and renewables in the years ahead.

The performance of income-oriented securities is mixed in 2021, as the benchmark 10-year Treasury yield jumped from 0.9% in January to 1.75% in March and then dropped back to the current 1.25% range. The pack is generally led by income securities that have an equity component, such as REITs and high-yield dividend stocks, which are up 27% and 18%, respectively. (Note: we measure performance by reviewing category-specific ETFs.) Convertibles have returned almost 5% this year, while preferreds have risen 3%. At the other end of the spectrum, the major upward move in the bond benchmark earlier this year has impacted U.S. government bond performance, as that group is down 2.0%. Investors are worried about emerging market economies as well, and returns are also down about 2.0% for that group. The overall fixed-income security benchmark AGG is down 1.2% year-to-date. At this point in the macro cycle, we see better value in intermediate (3- to 7-year) U.S. Treasuries and securitized-debt securities from a risk/reward perspective. We would also continue to add a small position in inflation-protected securities due to the recent rise in long-term rates and expectations for economic improvement. In addition, we would look to add shorter-duration investment-grade securities or ETFs as the risk of higher long-term rates (duration risk) outweighs the low coupons.

Stocks finished mixed in volatile trading on Thursday as investors assessed the likely timeline for Fed tapering and the uncertain impact of the Delta variant. Employment data was generally positive, as first-time unemployment benefit claims fell to 348,000, down from the prior week and below consensus. Continuing claims also fell from the prior week, to 2.820 million, but were slightly above the consensus forecast. On the earnings front, Macy's shares jumped nearly 20% after the company posted much better than expected 2Q results, reinstated its dividend, and raised its full-year guidance. The Dow fell 0.19%, the S&P rose 0.13%, and the Nasdaq rose 0.11%. Crude oil fell more than 2% to $64 per barrel, while gold fell slightly to $1783 per ounce.

Value stocks are outperforming growth in 2021 for the first time since 2016. While a recent rally in growth stocks has narrowed the performance advantage for value in the year to date, an environment of historically low interest rates is one in which many investors are still searching for high levels of income -- which often can be found in value stocks. When we look for attractive high-yield/deep-value stocks at Argus, we look for low valuations on metrics such as price/earnings, price/sales, price/book, yield, and price/cash flow. We also look for companies with clean balance sheets, high levels of profitability, high-quality earnings, and experienced management teams. We seek to avoid companies in industries that are in secular decline, or with dividend yields that are so high that the payout is clearly at risk. Based on numerous requests from clients, we have designed a portfolio of companies that are BUY-rated at Argus Research, have a Financial Strength rating of at least Medium, and have a yield of 3.0% or higher.

Stocks edged higher on Thursday afternoon, led by the Healthcare and Technology sectors. On the employment front, first-time jobless claims fell to 375,000 for the week ended August 7, down from the prior week and in line with the consensus forecast. Continuing claims fell to 2.866 million from 2.980 million a week earlier, and were also below consensus. After the close, Disney posted strong fiscal 3Q results, helped by better-than-expected growth in Disney+ subscribers and a recovery in the theme parks business. The Dow rose 0.04%, the S&P 0.30%, and the Nasdaq 0.35%. Crude oil fell to $69 per barrel, while gold rose slightly to $1755 per ounce.

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 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.