U.S. stocks slide and gold rises on crisis jitters

By Herbert Lash

NEW YORK (Reuters) - U.S. stocks cratered on Tuesday and gold prices soared as moves by European and U.S. central bankers to implement emergency measures to shore up the financial system failed to stave off panic that a deep recession is looming.

A more than 500-point decline in the Dow Jones industrial average capped the biggest five-day point loss ever for the blue chip index.

The sharpening stock market losses renewed the bid for safe-haven securities, with the price of U.S. government debt paring or erasing losses.

Federal Reserve Chairman Ben Bernanke, in a dramatic shift to support the battered economy, signalled a readiness to cut interest rates and the Fed stepped forward as a commercial lender of last resort.

But investors sought a concerted global effort to stem the growing financial crisis. Earlier, European shares closed modestly lower on disappointment about the lack of a coordinated push by the world's leading central banks to cut interest rates.

Banking stocks were slammed on both sides of the Atlantic.

The price of spot gold soared 3.4 percent, while in euro terms gold rose to an all-time high, Reuters data showed, spurred by buying of the traditional safe-haven.

The International Monetary Fund also urged a more coherent and coordinated set of global policies to calm market jitters. The IMF increased its expectations of worldwide credit losses to $1.4 trillion (802 billion pounds), almost a 50 percent increase from April.