NEW YORK, July 24 (Reuters) – U.S. stock futures fell and gold hit a new record on Sunday as Washington was no closer to raising the U.S. debt ceiling to avert a devastating default.

The decline in equity futures points to a poor open for U.S. markets and shows investors are getting increasingly worried about the failure of legislators to coalesce around one approach that will resolve the stalemate that is unnerving investors.

“The fact that they seem to be jumping from one type of proposal to another and not converging on anything is beginning to worry markets,” said Steven Englander, head of G10 FX strategy at Citigroup.

In Asia, Japan’s Nikkei index was down 0.5 percent in Monday morning trade.

S&P 500 futures fell at the outset of electronic trading. The benchmark S&P SPc1 was down 0.8 percent, or 11 points, at 1,330.20.

Gold rose to $1,614.71 an ounce, just off a new record for the precious metal reached earlier in the session, as it has been a favored asset of those seeking safety from declining U.S. assets.

Currency trading also showed investors moving away from the U.S. dollar, with the biggest drop in the greenback coming against the Swiss franc. The dollar dropped to 0.8153 against the Swiss franc , down 0.4 percent.

NEW YORK (Reuters) – Wall Street futures fell and the dollar dropped as Washington appeared no closer to raising the debt ceiling in order to avert a devastating default.

S&P 500 futures fell at the open of electronic trading as investors grew increasingly worried at the lack of progress. The benchmark S&P was down 1 percent, or 14 points, to 1326.00.

Early currency trading suggested a move away from the dollar, with the biggest drop in the greenback coming against the Swiss franc. In early Asian trading, the dollar dropped to 0.8121 against the Swiss franc, down 0.7 percent.

The decline in futures points to a poor open for U.S. markets.

White House officials and Republican leaders scrambled on Sunday to reassure global markets the United States would avert a debt default, but the two sides were still not close to a deal. House Speaker John Boehner told fellow Republicans on a conference call that a large-scale debt deal was not possible with President Barack Obama.

An aide to Senate Majority Leader Harry Reid told Reuters on Sunday the Nevada senator was outlining a plan that would cut $2.5 trillion in spending and increase the debt limit that he hoped would be brought to the Senate floor this week.

Earlier in the day, White House Chief of Staff Bill Daley warned that there would be a “few stressful days” ahead for financial markets.

NEW YORK (Reuters) – Spreadtrum Communications Inc (SPRD.O: Quote, Profile, Research, Stock Buzz) shares fell sharply on Tuesday, but later rebounded after noted short-selling researcher Muddy Waters said it was shorting the stock, claiming a “high risk” of misstatements in the Chinese semiconductor maker’s financials.

Unlike other firms targeted by Muddy Waters, Spreadtrum’s sell-off has not been as harsh.

Spreadtrum shares slid more than 30 percent after Muddy Waters said in an email that it was most concerned about the company’s 2010 and 2011 numbers. But buyers emerged by midday and the shares recovered most of their losses to close at $12.49, down 3.5 percent on the day.

Calls to Spreadtrum’s office in San Diego were routed to an answering machine and there was no answer at the company’s offices in Zhangjiang, China. Company officials did not respond to messages.

Bearish bets have been increasing in the last several days in the options market, said Gareth Feighery, a founder of Philadelphia-based options education firm MarketTamer.com, with put options volume far outweighing call volume.

“This disproportionately large volume of put trading relative to call trading is indicative of bearish sentiment among options traders,” he said.

Spreadtrum is the latest U.S.-listed Chinese company to be hit hard following a report questioning its accounting practices. The shares are down 32 percent on the year.

NEW YORK, June 21 (Reuters) – The spectacular collapse of Sino-Forest, a Canadian-listed Chinese company, raised pressure on North American regulators to stem the tide of accounting scandals that has engulfed investors eager to tap into Chinese growth.

U.S. Securities and Exchange Commission head Mary Schapiro said on Tuesday that it is exploring ways to address investor concerns about shoddy accounting that has caused numerous Chinese companies to restate earnings as their share prices have plummeted.

The accounting concerns have caused investors to largely shun U.S. and Canadian-listed Chinese stocks, beginning with those that came to the region’s exchanges through reverse takeovers, and later extending to well-known names that had initial public offerings, such as Internet companies Renren (RENN.N: Quote, Profile, Research, Stock Buzz) and Baidu.com (BIDU.O: Quote, Profile, Research, Stock Buzz).

A loss of about $4 billion in the market value of Sino-Forest (TRE.TO: Quote, Profile, Research, Stock Buzz) following a short seller’s report on June 2 alleging massive accounting fraud is one of the biggest and fastest corporate meltdowns in Canada in many years.

The stock is down 89 percent in that period, including a 27 percent drop on Tuesday. The price of Sino-Forest’s debt has also plunged with its 10.25 percent bond due 2014 trading at about 44 cents on the dollar, Thomson Reuters data showed.

The Ontario Securities Commission has opened a probe into the affair, but its representatives were not immediately able to comment on the scandal, or to say if they had plans to respond to share trades and volumes that appear disorderly at best.

Sino-Forest has denied the allegations of accounting fraud and set up a committee to carry out its own investigation.

NEW YORK (Reuters) – A prominent short-seller of Chinese shares raised questions about Harbin Electric’s (HRBN.O: Quote, Profile, Research, Stock Buzz) management on Thursday, sending its shares reeling.

Citron Research, run by Andrew Left of Los Angeles, had raised questions early in June about a $400 million credit agreement between Harbin’s CEO and China Development Bank to finance a buyout of Harbin.

Left reiterated those concerns on Thursday in a note on his website that made allegations about how Tianfu Yang, Harbin’s chief executive, and his brother, Tianli Yang, obtained a loan in 2004.

Shares of the maker of electric motors plunged on the report, and were lately down 42 percent to $8.44 on nearly 7 million shares traded on the Nasdaq Stock Market, making it the busiest day in Harbin’s history.

An assistant to Harbin Electric’s U.S.-based investor relations officer, Christy Shue, said she was traveling and not immediately available for comment.

Harbin CEO Yang, along with private equity firm Abax Global Capital, had made a $750 million offer to take Harbin private last October, but they have yet to make a formal bid.

“Why is the company so afraid to be judged without a takeover bid?” said Left, in an interview with Reuters on Thursday. “The market speaks for itself. If you believe the deal is going to be done at $24 then here is a great buying opportunity. But that is not what I believe. This just underscores the danger of investing in Chinese RTOs.”

NEW YORK, June 15 (Reuters) – China-Biotics Inc (CHBT.O: Quote, Profile, Research, Stock Buzz) said on Wednesday it will not file its annual report on time due to “serious issues” raised by its auditors, making it the latest U.S.-listed Chinese company to disclose accounting issues.

The Shanghai-based manufacturer and seller of probiotics products said it delayed the filing because its auditor, BDO Limited, told the company that it had “identified certain serious issues as part of its ongoing audit work and would need the company to take certain actions and provide additional information.”

The news comes on the heels of damaging reports alleging auditing problems at Sino-Forest Corp (TRE.TO: Quote, Profile, Research, Stock Buzz) less than two weeks ago, resulting in heavy selling of Chinese shares.

China-Biotics is one of more than 150 companies in the China region that first listed on U.S. exchanges through a controversial practice known as a reverse merger. The accounting practices at a number of these companies have been questioned, and the shares of some have been delisted by major exchanges.

China-Biotics’ accounting had originally been questioned last September by Citron Research, run by investor Andrew Left. He later put up a website urging the company’s auditor to look more closely at the accounting.

China-Biotics said in its filing with the Securities and Exchange Commission on Wednesday it did not know when it could provide all of the information raised by its auditor. It also said it was unable to determine whether earnings statements included in annual filing “will reflect any significant change in the company’s results of operations from the corresponding period for the last fiscal year.”

Shares of the stock were halted shortly before the close of trading on Wednesday, down 8.5 percent to $3.46 a share.

NEW YORK, June 9 (Reuters) – Regulators scrambled to warn of the risks surrounding Chinese companies that have listed in the U.S. through reverse mergers, though critics said the intervention was too little, too late following a series of accounting scandals.

Brokerages also continued to crack down by preventing investors from borrowing on margin to buy many Chinese stocks amid concerns about whether they were overvalued.

The U.S. Securities and Exchange Commission said Thursday that it was urging investors to review company filings and in particular watch for those who are not required to file financial reports with the regulator, but plenty of investors have already been burned.

The Nasdaq Stock Market also moved to amend earlier proposed new listing requirements for companies that had gone public by combining with listed shell entities.

The SEC, which has also launched a broad investigation into accounting irregularities and audits of Chinese and other foreign companies listed in the U.S., is being slammed by some for jumping in far too late.

“This is akin to trying to put the horse back in the barn,” said Lynn Turner, former chief accountant for the SEC.

“The SEC has been aware of this problem for years. While it is better late than never, it would be great to see at least one proactive regulator in DC who keeps the horse in the barn.”

NEW YORK, June 8 (Reuters) – A Chinese company operating a website for children, which plans to sell shares in an initial public offering on Wednesday night, has disclosed its auditors found major gaps in its internal controls.

The admission from Taomee Holdings Limited (TAOM.N: Quote, Profile, Research, Stock Buzz), in its offering prospectus under the risk factors section, comes at a time when heightened scrutiny of many U.S.-listed Chinese companies and the reliability of their accounts has caused investors to flee their shares.

The company, which operates the site www.61.com is seeking to sell 7.2 million American depositary shares for $9 to $11 each before a planned listing on the New York Stock Exchange on Thursday.

In the prospectus, the company says that the company and its auditors found “significant deficiencies in our internal control over financial reporting” and that it lacked enough expertise to comply with U.S. accounting rules.

“The material weakness observed was our lack of sufficient accounting resources and expertise necessary to comply with U.S. GAAP (Generally Accepted Accounting Principles) and to prepare and review financial statements and related financial disclosures under U.S. GAAP for SEC reporting and compliance purposes,” Taomee said.

That is not unusual for a Chinese company but could raise eyebrows among investors who have been shunning an increasing number of Chinese companies listed on the New York Stock Exchange and Nasdaq markets due to growing worry about accounting scandals.

The concerns have been exacerbated in recent days as some U.S. brokerages have started to restrict investors from using borrowed money to buy such shares.[ID:nN3181942][ID:nN07182221][ID:nN08264922]

NEW YORK (Reuters) – July is normally when Wall Street bond traders take a break to soak up some sun — but not this year.

The showdown over the federal debt ceiling in Washington threatens to trigger a default on Treasury debt — however temporary — and may keep trading desks staffed throughout the month, said Jim Caron, Morgan Stanley’s global head of interest rate strategy.

“We’ve got to be ‘all hands on deck,’ particularly in July and August … The fireworks really start and we are very concerned about it,” Caron said at the Reuters 2011 Investment Outlook Summit in New York. He added that the bank is telling staff to stick around this summer.

The U.S. Treasury Department has urged Congress to increase the $14.29 trillion ceiling before August 2. A missed coupon or some other technical default would surely wreak havoc at bond trading desks, Caron said.

“When we built our systems and our risk metrics, we never built in the fact that the U.S. Treasury might miss a coupon

payment,” he said.

Treasury bond buyers are used to a market that runs smoothly and unlike some emerging markets, payments are never missed and a buyer can always be found in any situation.

TORONTO/NEW YORK, June 3 (Reuters) – A damning short-seller’s report accusing Sino-Forest Corp (TRE.TO: Quote, Profile, Research, Stock Buzz) of theft and fraud put the skids under the Canadian-listed company on Friday, even as it denied there was a problem.

Sino-Forest, which operates forest plantations in China, denied that its financial filings had exaggerated the company’s holdings and told investors to exercise “extreme caution” in assessing the report, issued by research firm Muddy Waters.

“Muddy Waters has a short position in the company’s shares and therefore stands to realize significant gains from a share price decline that it precipitated,” Sino-Forest said in a statement issued after its shares fell 24 percent on Thursday.

Sino-Forest – who’s top shareholder at the end of April was billionaire hedge-fund manager John Paulson – fell a further 65 percent when trade resumed on Friday, hitting an all-time low of C$4.99 on record volume of more than 20 million shares.

It was the Toronto Stock Exchange’s most actively traded stock by far. Before the halt, the stock was at C$14.46.

In a 37-page report, Muddy Waters said its researchers found that Sino-Forest had exaggerated its assets and falsified its investments.

“Like Madoff, (Sino-Forest) is one of the rare frauds that is committed by an established institution,” it said, referring to convicted fraudster Bernie Madoff. Its “capital raising is a multi-billion dollar Ponzi scheme, and accompanied by substantial theft.”