Stocks rose modestly on Thursday morning, but gave up strong early gains amid a range of first-quarter earnings reports and new GDP and employment data. Investors also weighed President Biden's ambitious plans for new spending on families and education. The Commerce Department said that the U.S. economy expanded at a 6.4% annualized rate in the first quarter, above the Reuters consensus forecast of 6.1% and up from 4.3% growth in the fourth quarter. The Dow rose 0.1%, the S&P 0.3%, and the Nasdaq 0.1%. Crude oil rose 1.5% to $65 per barrel, while gold traded near $1768 per ounce.

With April winding down, you can count on someone, somewhere saying, 'sell in May and go away.' That pronouncement is mainly popular because it rhymes. While it is true that summer is typically a period of relative underperformance, market timing rarely works. And sometimes summer is a good time for stock performance.

The S&P 500 is nearing 4,200 and riding its weekly Bollinger Band like a champ, but is very extended from its 200-day and 200-week averages. As well, sentiment is in La La Land. So has the stock market fully discounted most/all of the good news or do we have some decent upside left?

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.

President Joe Biden is preparing to announce an infrastructure-rebuilding plan that he estimates will create up to 10 million clean energy jobs. The following areas of the economy stand to benefit from the government spending, which could total as much as $4 trillion. The first element of the plan is improving the country's infrastructure, from roads and bridges to water systems and electricity grids.

Thursday was another odd day. Major stock indices again saw a decent-sized reversal, this time from mid-morning lows (the opposite of what happened on Wednesday). NYSE breadth saw decliners ahead of advancers by 1,900 issues early on, but the advance/decline stats finished with over 1,300 net advancers.

We recently raised our rating on the Communication Services sector to Over-Weight. In this barbell sector, media and entertainment companies should benefit from robust online activity and the reopening of theme parks and movie theaters. Providers of telecom services should benefit from ARPU gains as the 5G rollout gains traction. The style mix of the sector is approximately one-third value and two-thirds growth. The adjusted pro-forma beta is approximately 1.1 (like the old telecoms), while the yield is 0.9% (reflecting the impact of Google and Facebook). The smoothed growth rate is 7% and the P/E ratio is 21x. The sector accounts for 11% of the S&P 500. We think investors should consider allocating 12%-14% of diversified portfolios to the sector. Here are some of our top picks.

We have adjusted our recommended sector allocations. The following reflects our guidance for the calendar second quarter of 2021. We have raised the Communication Services sector to Over-Weight from Market-Weight. We have also raised the Energy and Real Estate sectors to Market-Weight from Under-Weight. Finally, we have lowered the Utilities sector to Under-Weight from Over-Weight and the Consumer Staples sector to Under-Weight from Market-Weight. The rebalancing process takes place four times a year, early in the months of March, June, September, and December. Our current Over-Weight sectors are Technology, Healthcare, Financial Services, Industrial and Communication Services. Our current Market-Weight sectors are Consumer Discretionary, Energy, Real Estate and Basic Materials. Our Under-Weight sectors are Utilities and Consumer Staples. Argus suggests that investors use this process to tweak weightings within their balanced equity portfolios in order to take advantage of valuation imbalances.