U.S. markets fall early Thursday

NEW YORK, July 2 (UPI) -- U.S. markets tumbled Thursday morning after the Department of Labor said the unemployment rate rose from 9.4 percent to 9.5 percent in June.

Economists had predicted a sharper increase, but 467,000 jobs lost in the month, undermined confidence in a recovery.

In late morning trading, the Dow Jones industrial average lost 168.83 points, or 1.99 percent, to 8,335.23. The Standard & Poor's 500 dropped 2.14 percent, 19.80 points, to 903.53. The Nasdaq composite index shed 42.31 points, 2.29 percent, to 1,803.41.

The benchmark 10-year U.S. Treasury bond rose 14/32 to yield 3.497 percent.

The euro fell to $1.4016, compared to Wednesday's $1.4142. Against the Japanese yen, the dollar fell to 96.09 yen, compared to Wednesday's 96.64 yen.

In Tokyo, the Nikkei average lost 63.78 points to 9,876.15, off 0.64 percent.

Poll: Canadians trimming vacation spending

TORONTO, July 2 (UPI) -- Nearly half of Canadians with summer vacation plans intend to spend less than usual because of the recession, a poll published Thursday suggests.

Of 2,262 adults questioned by the EKOS polling firm last month, 48 percent said their vacation budgets would be smaller, the Canadian Broadcasting Corp. reported.

Of the remainder, 32 percent said they expected to spend the same as previous years, while 20 percent they would spend more for a vacation than usual. The margin of error was 2.1 percent.

Frank Graves, president of the polling company, said there was a "paradoxical" quality to the poll's findings.

"It is obviously sensible from an individual perspective to cut back in hard times," he said. "However, this will also make it harder for the economy to emerge from the recession."

The federal Statistics Canada agency reported this week total spending on tourism in the country declined 1.3 percent in the first quarter of 2009.

Five SEC investigations missed Madoff

WASHINGTON, July 2 (UPI) -- The U.S. Securities and Exchange Commission failed to uncover Bernard Madoff's Ponzi scheme on five occasions in 20 years, a source close to the agency said.

Madoff was sentenced Monday to 150 years in prison after pleading guilty to 11 counts of fraud. The SEC is investigating how it may have missed detecting the massive fraud that may have lost as much as $50 billion, The Washington Post reported Thursday.

On one occasion in 2004, SEC investigator Genevievette Walker-Lightfoot in the Office of Compliance Inspections and Examinations, warned supervisors that Madoff's paperwork and electronic data were full of irregularities.

She took her concerns to her supervisor Mark Donahue, who was working under Eric Swanson, then an assistant director of the department.

Swanson, who is no longer with the SEC, later married Madoff's niece.

Walker-Lightfoot's claims turned out to be consistent with the case the Justice Department eventually brought against Madoff.

When she brought her concerns to Donahue, however, he directed her to concentrate on an investigation of mutual funds, which was a pressing need at the time.

"Concentrate on mutual funds for the time being," an email from Donahue to Walker-Lightfoot said.

Investment in China outpacing outflow

BEIJING, July 2 (UPI) -- China has been making big investments abroad but officials say these outflows are unlikely to outstrip inward foreign direct investments any time soon.

The officials and other experts said ODIs, or overseas direct investments, have surged recently but that FDIs also have kept pace, China Daily reported.

Some foreign banks and organizations have said the surge may cause ODIs to overtake China's FDIs, but Chinese experts told the newspaper that is unlikely at least this year, partly because of Chinalco's failed $19.5 billion bid boost its stake in Rio Tinto, an Anglo-Australian diversified mining company with headquarters in London.

Chinalco is the Aluminum Corp. of China.

The report also said that while Chinese National Petroleum Corp. and British Petroleum won a bid to develop Iraq's biggest oilfield this week, it may not significantly raise the investment outflows this year because most deals signed in the past few months are "of small volume."

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