* U.S. stocks fall 3.0 pct,
* European stocks down 4.0 pct, Japan down 3.0 pct
* Oil falls to 20-month low of $58.32
* U.S. dollar recovers
(Updates with U.S. trade, changes dateline from LONDON,
changes byline)
By Burton Frierson
NEW YORK, Nov 11 (Reuters) - Economic gloom overpowered
financial markets again on Tuesday, sending world stock and
commodity prices sharply lower as enthusiasm about China's $600
billion stimulus plan announced late Sunday fizzled out.
Bad news for economic growth came with data showing import
growth slowed in October in China, the world's fourth-largest
economy, as domestic demand cooled.
This followed Friday's dismal U.S. jobs report and both
overshadowed plans that China planned to spend nearly $600 bln
to stimulate its economy with new government spending between
now and 2010, leaving investors to brace for a long spate of
weak data.
The gloom pushed U.S. stocks 3.0 percent and sent oil
<CLc1> which is heavily dependent on global growth, to a
20-month low of $58.32 a barrel. Gold <GCc1> also took a hit
while the U.S. dollar <.DXY> was broadly firmer.
"More news is going to come out in the negative vein. You
don't know where the bottom is," said Stephen Carl, principal
and head of U.S. equity trading at The Williams Capital Group
LP in New York.
The Dow Jones industrial average <> was down 296.05
points, or 3.34 percent, at 8,574.49 at midday. The Standard &
Poor's 500 Index <.SPX> was down 32.92 points, or 3.58 percent,
at 886.29. The Nasdaq Composite Index <> was down 50.67
points, or 3.13 percent, at 1,566.07.
BAD NEWS IS BAD NEWS
Bad news from corporate America -- General Motors <GM.N>
shares currently at a 65-year low, Goldman Sachs <GS.N> seen
posting a first-ever quarterly loss, and the second largest
U.S. electronics retailer Circuit City's <CC.N> bankruptcy
filing on Monday -- overwhelmed any optimism.
Adding to the grim tone, Merrill Lynch & Co <MER.N> Chief
Executive John Thain said the global economy is in a deep
slowdown and will not recover quickly, and the environment
recalls 1929, the advent of the Great Depression.
[]
Blaming faltering global demand, Alcoa <AA.N> cut
aluminum-making capacity worldwide. The company, a Dow
component, saw its shares slide 7.0 percent. []
The diminishing appetite for risky assets, including
stocks, roiled markets across Asia overnight and pushed
European shares down.
The pan-European FTSEurofirst 300 <> stock index
closed down 4.22 percent. Japan's Nikkei average <> ended
down 3.0 percent.
The German government's panel of economic advisers will
forecast on Wednesday that the country will be "in recession"
next year, a source familiar with the data told Reuters on
Tuesday. []
The U.S. government bond market was closed for Veterans
Day, depriving investors of a traditional safe haven during
times of trouble in financial markets.
Investors' fear of risky assets benefited the U.S. dollar,
which edged higher against a basket of currencies. The U.S.
Dollar Index <.DXY> was up 1.29 percent at 87.084 from a
previous session close of 85.971. The euro <EUR=> was down 1.45
percent at $1.2546 from a previous session close of $1.2731.
The Japanese yen also rose against most currencies as
worries over slowing growth kept up the pressure to reverse
carry trade positions, where low-yielding currencies like the
Japanese currency are used to buy assets in higher-yielding
ones.
Against the yen, the U.S. dollar <JPY=> was down 0.43
percent at 97.57 from a previous session close of 97.990.
SLIPPERY SLOPE FOR OIL
Oil prices tumbled as the slide in global stock markets
refocused attention on the prospect of widespread recession,
which is likely to cut deep into oil demand in many developed
economies. U.S. light sweet crude oil <CLc1> fell $3.55, or
5.69 percent, to $58.86 per barrel.
"We are expecting prices to go lower before they go higher
with U.S. crude hitting $50 before its reaches $65 again," said
Simon Wardell, oil analyst at Global Insight in London.
The origins of the current global downturn trace back to
this decade's boom and bust in the U.S. housing market.
Tumbling home prices have spread fallout through financial
markets and the economy, leading to a severe tightening of
credit that is still hurting investors far and wide.
In fact, the price of gold fell on Tuesday, due in part to
liquidation pressure because of a still-tight credit market.
Gold <XAU=> fell $15.70, or 2.11 percent, to $729.80.
(Additional reporting by Jeremy Gaunt in London and Reuters
bureaus throughout Asia, Europe and the Americas)
