In Today's Business News

According to Tim Paradis, business writer for the Associated Press, investing in stocks is once again a risky affair. Stocks, which have dropped to their lowest in six weeks, are sending investors into a tizzy.

Internationally, markets are on the fritz. The Shanghai and European markets, for instance have experienced a significant drop. At home, the Dow Jones saw a decrease of 165 points.

It is no particular industry that is taking the brunt of the downturn. Stocks from all industries are taking the hit.

It seemed that things were turning around for big companies. Numbers were looking good, but that was not the result of an increase in product or service sales. Rather, it was the result of companies' financial revamps. Cutting back and looking for new ways to save made it appear that the businesses were going to see an upswing in the near future. Overall, sales have hardly budged and this poses a significant problem for companies and their investors. "Strong [economic] recovery" is dependent upon the freedom with which consumers can buy products.

This news, though bleak, is not indicative that other markets are in such a crisis. Real Estate, as reported, is in fact seeing improvements and numbers indicate a positive turnaround.

Investors Stick to what's Safe

Sara Lepro of the Associated Press reports that in the midst of this confusing economic atmosphere, the costs of products are falling. Investors are erring on the side of caution, dropping riskier ventures and sticking with "safer assets".

The nervous consumer is responsible for the lack of sales and the stock market downturn. The population has severely cut back its spending and big companies are experiencing financial pain, having to take cost cutting measures to make up for the loss in sales.

Companies and their investors are wary and rightfully so. Without the consumer, the economy cannot make a strong recovery. Consumer spending is fundamental to pulling the country out of its economic slump.

NY Attorney General Suing Charles Schwab

According to Reuter's Jonathan Stempel, New York Attorney General Andre Cuomo is suing big name company Charles Schwab for "misleading investors about the safety of auction-rate securities". This comes as no surprise, however, because the New York Attorney General voiced his intent to file suit against the company in late July.

In response to the allegations, Charles Schwab has claimed that Cuomo's suit against the company "lacks merit" and rather than punish the company, the underwriters should be held accountable for the fraudulent deception.

Sources:

Lepro, Sara. Investors sell off commodities; silver sinks 5 pct. Associated Press. August
17, 2009. Retrieved at http://news.yahoo.com/s/ap/20090817/ap_on_bi_ge/us_commodities_review_1

Pradis, Tim. Stockstumble as investors worry about consumers. Associated Press.
August 17, 2009. Retrieved at http://news.yahoo.com/s/ap/20090817/ap_on_bi_st_ma_re/us_wall_street

Stempel, Jonathan. Schwab sued by NY's Cuomo over auction-rate debt. Reuters. August
17, 2009. Retrieved at http://news.yahoo.com/s/nm/20090817/bs_nm/us_charlesschwab_cuomo_3