Stocks fluctuated on Thursday morning, a day after Wednesday's strong rally, as President Biden prepared to announce a new federal pandemic response strategy that will include an accelerated vaccine rollout. On Wednesday, Mr. Biden signed 17 executive orders reversing Trump administration policies in such areas as climate change, immigration, racial equality, and government accountability. On the employment front, the Labor Department reported that first-time claims for state unemployment benefits fell to 900,000 for the week ended January 16, down from a revised 926,000 a week earlier and below the Bloomberg consensus forecast of 935,000. The Dow fell 0.1%, the S&P rose 0.1%, and the Nasdaq rose 0.5%. Crude oil fell to $53 per barrel, while gold traded near $1863 per ounce.

Stocks rose strongly on Wednesday morning ahead of the inauguration of Joseph R. Biden as the nation's 46th president. President Biden enters the White House facing the twin crises of the pandemic and a battered economy, and is expected to move quickly on new stimulus measures and other initiatives. He will also sign a wide range of executive orders reversing Trump administration policies on his first day in office. The Dow rose 0.6%, the S&P 1.1%, and the Nasdaq 1.7%. Crude oil traded near $53.50 per barrel, while gold rose $16 to $1856 per ounce.

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.

We saw some strange trading days in late 2020, and the majority of them had to do with the massive rotation that was happening at the time. But maybe we should start calling days like Thursday, January 14 more the norm than wacky. As we said recently, 2021 is starting out as the polar opposite of 2020 -- at least as far as the markets are concerned.

Argus has published its latest Portfolio Selector, which features its popular Focus List. Each month, Director of Research Jim Kelleher, CFA, surveys the team of Argus Research industry analysts for their timeliest recommendations out of the company's fundamental universe of approximately 500 stocks. The Focus List typically includes 30 stocks: turnover is high, as Director of Research Kelleher typically adds three or four new stocks per month. Below are the latest additions, all of which are rated BUY at Argus.

The stock market moved lower last week, as a Thursday afternoon selloff sent stocks into the red. Large-cap tech stocks were worse off than blue chips as investors digested Biden's stimulus plans and cabinet picks. During Friday's session, the Dow Jones Industrial Average fell 177 points, or 0.57%. The S&P 500 was down 0.72%, and the Nasdaq Composite was down 0.87%. For the week, the DJIA decreased 284 points, or 0.91%, the S&P 500 decreased 1.48%, and the Nasdaq Composite fell 1.54%.

Stocks gave up early gains and finished lower on Thursday, as investors awaited new proposals from President-elect Biden to boost the economy and combat the pandemic. Mr. Biden's plan is expected to include substantial financial aid for individuals, small businesses, and state and local governments, as well as increased spending on vaccine distribution. On the earnings front, Delta Air Lines shares rose despite a wider-than-expected adjusted 4Q loss, as the company projected a return to revenue growth and profitability in 2021. BlackRock posted strong 4Q results, helped by increased fund inflows, though the shares fell following the report. The Dow fell 0.22%, the S&P 0.38%, and the Nasdaq 0.12%. Crude oil rose to $53.50 per barrel, while gold fell $9 to $1846 per ounce.