Asian shares have fallen for a second day on Wednesday and oil prices have slipped back to an almost 20-month low as poor corporate earnings highlighted the damage from the global economic slowdown on companies and consumers.
Japan's Nikkei average dipped 0.3% after losing more than 2% in early trading.
The MSCI benchmark index of Asian stocks outside of Japan fell 0.5% in early trading.
Analysts said a slowdown in Chinese import growth suggested domestic investment was slowing more quickly than demand for its goods.
The troubles in the United States cast a shadow on the rest of the world.
Shares of General Motors slid to a 65-year low on mounting worries about whether it can avoid bankruptcy.
On Tuesday, and US President-elect Barack Obama urged the Bush administration to help out the ailing auto industry.
Oil, which is heavily dependent on global growth, sank more than $US3 a barrel in New York after two days of minor gains, as stock markets tumbled on recession fears.
On the New York Mercantile Exchange, light sweet crude for December tumbled $US3.08 lower to close at $US59.33. In London, Brent North Sea crude for delivery in December dropped $US3.37 to settle at $US55.71 on the InterContinental Exchange.
Prices have shed about 60% since scaling historic highs above $US147 in July on mounting evidence of slowing global economic growth and energy demand.
The Dow Jones Industrial Average tumbled 180.72 points, or 2.04%,to 8,689.82 at the closing bell and the tech-heavy Nasdaq dropped 35.98 points, or 2.23% to 1,580.76. The broad Standard & Poor's 500 index retreated 20.54 points, or 2.23% to 898.67.
In London, the benchmark FTSE-100 was 157.23 points, or 3.57%, lower at 4,246.69 points. European shares closed sharply lower, with the FTSEurofirst 300 index down 4.2% at 883.56 points, after rising 0.9%on Monday.
The widening global slowdown has prompted a rash of corporate profit warnings and led some companies to warn about their ability to operate in the darkening environment.
Mr Obama urged President George Bush to back a second stimulus package to aid the economy and asked him to use existing bailout measures to help an auto industry battered by a rapid drop-off in sales, an aide said.
Evidence of a global slowdown was ample as the worst financial crisis in 80 years, arising from huge banking losses in the slumping American housing market, has sown a broad economic downturn. Even fast-growing China has not been immune.
Chinese import growth slowed in October and inflation fell to a 17-month low as domestic demand cooled, raising the likelihood Beijing will soon cut interest rates to back up the government's new economic stimulus plan.
In Japan, exports fell nearly 10% in the first 20 days of October, corporate bankruptcies jumped 13.4% year-on-year and sentiment in its service sector hit an all-time low, all signs the world's second-biggest economy was teetering on the brink of recession.
British retail sales fell by the biggest amount in more than three years in October, and a housing industry survey showed home sales slumped to their lowest level in at least 30 years.
Summit hopes
Investors are looking to a summit of world leaders in Washington on Saturday for new solutions, following moves worldwide to cut interest rates, free up seized money markets and recapitalize banks, at a cost of more than $US4 trillion.
"We need monetary and fiscal policy coordination across the world ... a broad, concerted economic response is now urgent," British Prime Minister Gordon Brown told a news conference.
"The second priority is that we agree a timetable for measures that will clean up the failings in our banking system."
But officials are playing down the likelihood that the weekend meeting will produce dramatic measures, and aides to Mr Obama - whom world leaders have urged to make the credit crisis his No1 priority - said he would not attend.
Mr Brown said there could be no retreat into protectionism and that he was confident Mr Obama shared that view.
Once he takes power in January, Mr Obama and congressional Democrats are expected to craft a fiscal stimulus package that will pump billions of dollars into the US economy.
US housing payment terms eased
In the latest effort to reverse a wave of mortgage defaults threatening the US economy, the government announced a sweeping programme to ease payment terms for hundreds of thousands of homeowners struggling to service mortgages held by home finance giants Fannie Mae and Freddie Mac.
The Streamlined Loan Modification programme aims to widen and speed up the adjustment of home loans to stifle the growth in delinquencies and foreclosures in the US housing industry.
Fannie Mae and Freddie Mac own or guarantee almost 31 million mortgages, including roughly 58% of all single-family mortgages in the US.
