U.S. urges unified response as crisis hammers stocks

By Daniel Trotta and Kevin Krolicki

NEW YORK/WASHINGTON (Reuters) - Governments around the world scrambled for new measures to contain the fast-spreading credit crisis as stock, bond and commodity markets bet on deepening uncertainty and a sharp downturn.

U.S. officials called for a "forceful and coordinated" global reaction to the crisis, and U.S. stocks bounced back from a five-year low on signs policymakers were readying new steps to thaw frozen credit markets.

Even after late-day gains, the Dow Jones Industrial Average closed down 3.5 percent on Monday, capping its worst four-day point run since September 2001.

Stock markets in Europe and Asia were also hammered in the first full-day of global trade since the U.S. Congress approved a $700 billion (401.5 billion pound) bailout intended reassure markets that help was on the way.

Instead, a crisis that began with the overheated U.S. property market and the $11 trillion U.S. mortgage market was still rocking confidence worldwide.

"The ground underneath our feet is moving like an earthquake," said acting U.S. Treasury Undersecretary for domestic finance Anthony Ryan.

Expectations have built for a rate cut by the U.S. Federal Reserve, possibly as part of a coordinated move with the European Central Bank.

Fed fund futures have priced in a probability of a 75-basis-point cut by the U.S. central bank this month.