Portfolio

WASHINGTON—Standard & Poor's downgrade of U.S. debt last week is likely to hasten the replacement of credit ratings within bank regulatory requirements.

Investors desperately seeking diversification amid all the volatility in stocks both in the U.S. and abroad found some salvation in commodities last month as 15 of 19 constituents in the Dow Jones-UBS Commodity Index gained ground.

World cotton production in 2011 is now expected to exceed more than 27 million tons, according RISI, resulting in lower prices in the dissolving pulp market.

Market volatility and an uneven path for the economic recovery are set to continue for years, according to Towers Watson. What’s more, all asset classes will face higher-than-average volatility, Towers Watson said.

The Securities and Exchange Commission has upheld an administrative judge’s ruling that a mutual fund trader must pay more than $200,000 in penalties for accepting gifts from broker-dealers to steer trades their way.

As a new market reality sets in, Bank of America Merrill Lynch is urging investors not to make rash moves with their current investments, and to also consider asset classes poised to profit in current conditions.

Market volatility and an uneven path for the economic recovery are set to continue for years, according to Towers Watson. What’s more, all asset classes will face higher-than-average volatility, Towers Watson said.

Rather than offer the complete lineup of a target-date series in their 401(k) plan, sponsors are selecting only those funds that fit the age and demographics of their employees. This could result in under-funded target-date funds that could put the entire lineup in jeopardy, according to a new report, “Trends in Date-Date Portfolios on Recordkeeper Platforms,” from Financial Research Corp.

The August reading of the Consumer Reports Index fell to 43.3, its lowest level since December 2009. Falling 5.1 points from 48.5 in July, the index registered its sharpest drop in two years.

Uncertainty and fear are driving affluent investors into cash at record levels, according to the MFS Investing Sentiment Survey. While investors of all ages are moving into cash, they are being led by Generation Y.