No relief seen in global economic crisis

By Jackie Frank

WASHINGTON (Reuters) - The global economy saw more signs of distress on Thursday with U.S. stocks plunging for a second consecutive day, oil prices falling, a surprise rate cut in Switzerland, export woes in Japan and rescue loans to Turkey and Iceland.

Wall Street was hostage to the rapidly changing news of a possible rescue for the U.S. auto industry, with the stock market rising on news of a tentative bipartisan deal in Congress for a $25 billion (16 billion pounds) package for Detroit and then falling to new lows when the deal ran into trouble.

Automakers held out hope. After the end of the trading day, the White House announced it could back a compromise plan pushed by Michigan senators to help by using $25 billion in Energy Department loans for greener cars, and urged Congress to act quickly. U.S. automakers said they will meet Democratic demands to offer a plan to return to profitability, and lawmakers said it could be considered the week of December 8.

In more bad news for the battered U.S. economy, the number of U.S. workers on jobless rolls surged to the highest in a quarter century, prompting Congress to extend benefits for the long-term unemployed.

Oil prices plummeted below $50 a barrel for the first time since 2005 as investors anticipate a long global recession will slash demand.

"I think this is going to be not only a deep recession, at least in the next couple of quarters, but also a long recession," said Conrad DeQuadros, senior economist at RDQ Economics in New York.

All three major U.S. stock indexes made broad swings, ending sharply lower due to deepening economic fears and investors' flight from risk. The Standard & Poor's 500 slid 6.71 percent to close at 752.44, its lowest since 1997. The Dow Jones industrial average slid 5.6 percent to close at 7,552.29 and the Nasdaq Composite Index fell 5 percent to end at 1,316.12.

World stocks tumbled to 5-1/2-year lows with volatile emerging market equities down 5.16 percent. An index of European shares fell 3.8 percent and Japanese stocks plunged nearly 7 percent.