Job cuts, auto woes deepen global recession fears

By Patricia Zengerle

WASHINGTON (Reuters) - Bleak outlooks from world carmakers and more news of big job cuts at major companies on Thursday deepened fears in corporate boardrooms and trading floors around the world of an extended global recession.

Asian shares tumbled, hit by weaker-than-expected Japanese export data, European stocks closed slightly lower as losses in banks and automobiles eclipsed gains in oil and defensive shares, and emerging markets were pounded again.

But after hitting a five-year low on Wednesday, U.S. stocks rebounded, with a bounce in energy and health-care stocks leading the Dow Jones Industrial Average to a gain of more than 2 percent and the S&P 500 up more than 1 percent, although the Nasdaq was off 0.73 percent.

The interbank cost of borrowing longer-dated dollars rose for the first time since governments detailed a raft of bank bailout measures, hurt by recession fears.

Former U.S. Federal Reserve Chairman Alan Greenspan told Congress he was "shocked" at the U.S. credit market breakdown and said he sees a jump in unemployment ahead. He also said he was "partially" wrong to resist regulation of some securities.

Despite past concerns that risks were being underestimated, "this crisis, however, has turned out to be much broader than anything I could have imagined," he testified to Congress.

Federal Deposit Insurance Corp Chairman Sheila Bair, a top U.S. banking regulator, said regulators were working with the Bush administration to create a loan guarantee program to ease pressure on homeowners.

She said the government must do more to guarantee mortgage loans to persuade lenders to modify their terms and help ward off foreclosures.