GLOBAL MARKETS-World stocks tumble on GM, economic fears

                                
 * Dow sheds 281 points on economic data, banking fears
                                
 * Dollar, government debt gain in revived safe-haven bids
                                
 * Oil slides, data stokes fear of deeper global slowdown
 (Adds close of U.S. markets)
                                
 By Herbert Lash
                                
 NEW YORK, March 5 (Reuters) - World stocks slid hard on
Thursday, with U.S. shares tumbling more than 4 percent, as
another spate of dire economic news and renewed worries about
banks slammed markets and boosted the appeal of safe-haven
assets.
                                
 Oil fell nearly 4 percent to trade below $44 a barrel amid
heightened expectations that fuel consumption will shrink
further because of the deteriorating economic outlook. For
details, see [ID:nSP418371]
                                
 The dollar strengthened against most major currencies as a
warning about the viability of General Motors <GM.N> and
persistent fears about U.S. and European banks sped the flight
from riskier assets.
                                
 Gold rose more than 2 percent, fueled by flight-to-quality
buying, and Treasury debt prices rallied as investors worried
that an anxiously awaited U.S. jobs report due on Friday will
show the worst employment declines in 60 years.
                                
 Shares of Citigroup <C.N>, once the world's largest bank by
market value, traded as low as 97 cents. Almost one out of
every four issues on the New York Stock Exchange hit 52-week
lows, while the number of declining shares outpaced advancers
by 12 to one.
                                
 Grim economic data signaled more fallout from recessions
around the world and added to investors' gloomy mood. The major
U.S. indexes slipped to fresh 12-year lows while a key index of
leading European shares set a fresh lifetime closing low.
                                
 "The loss of confidence is pervasive. There isn't any magic
bullet here that's going to save Citi or Bank of America. The
only thing that might save them is if the government comes in
and sponsors a bankruptcy," said John Schloegel, a vice
president of Capital Cities Asset Management in Austin, Texas.
                                
 The S&P 500 financial index <.GSPF> shed almost 10 percent,
while GM fell 15.5 percent to $1.86 after its auditors raised
"substantial doubt" about the automaker if it fails to head off
losses and stop burning cash. [ID:nN05319669]
                                
 The Dow Jones industrial average <.DJI> closed down 281.40
points, or 4.09 percent, at 6,594.44. The Standard & Poor's 500
Index <.SPX> shed 30.32 points, or 4.25 percent, at 682.55. The
Nasdaq Composite Index <.IXIC> fell 54.15 points, or 4.00
percent, at 1,299.59.
                                
 Both the Dow and S&P 500 are off more than 24 percent so
far this year, and the S&P has tumbled 56 percent from its
all-time high in October 2007.
                                
 "The auto industry is effectively being wiped out or
nationalized, however you want to think about it," said      
Rick Campagna, portfolio manager at Provident Investment
Council in Pasadena, California.
                                
 "Now you're talking about a good portion, if not all, of
the banking sector being wiped out. It's just getting
relatively dire," he added.
                                
 Dow Jones Indexes, creator of the iconic U.S. stock index,
said it was watching Citigroup's situation closely.
                                
 Financial shares also dragged European stocks lower after
staff at the European Central Bank forecast the euro zone's
economy could shrink by as much as 3.2 percent this year,
reigniting fears of a deeper recession. [ID:nL5616972]
                                
 The FTSEurofirst 300 <.FTEU3> index of top European shares
closed 3.7 percent lower at a record low of 670.72 points.
                                
 The European Union's statistics office confirmed that gross
domestic product in the fourth quarter shrank by the deepest
ever quarterly drop in the euro zone. [ID:nL5880710]
                                
 The dollar rose against a basket of major currencies, with
the U.S. Dollar Index <.DXY> up 0.6 percent at 89.039. Against
the yen, the dollar <JPY=> fell 1.11 percent at 97.98. The euro
<EUR=> slipped 0.59 percent at $1.256.
                                
 Government bonds rose as investors shifted out of riskier
assets. The benchmark 10-year U.S. Treasury note <US10YT=RR>
rose 1-10/32 in price to yield 2.82 percent. The 2-year U.S.
Treasury note <US2YT=RR> gained 2/32 in price to yield 0.90
percent.
                                
 Oil losses tracked a slide in equities markets.
                                
 "Economic and demand worries reflected in Wall Street's
sharp drop today are part of the reasons crude futures have
fallen today," said Kyle Cooper, director of research at IAF
Advisors in Houston.
                                
 U.S. crude <CLc1> futures slipped $1.77 to settle at $43.61
a barrel, while London Brent crude <LCOc1> fell $2.48 to
$43.64.
                                
 Gold futures for April delivery <GCJ9> settled up $21.10 at
$927.80 an ounce in New York.