And in an illustration of the alarm gripping America's auto industry and the impact of U.S. troubles on economies well beyond its frontiers, Ford Motor Co decided to sell its controlling interest in Japan's Mazda Motor Corp.

Banking, seat of a crisis inflicting the sharp international slowdown, also showed the strain. Britain's Barclays altered fund-raising plans to quell shareholder anger and profits in Japan's largest bank tumbled.

In Washington, Bush administration officials defended the decision to use bailout funds to recapitalize financial institutions, instead of buying bad assets as had been originally proposed.

U.S. Treasury Secretary Henry Paulson, in testimony to the House of Representatives Financial Services Committee, said the global slump had become so severe that "an asset purchase program would not be effective enough, quickly enough."

In a rare spot of positive corporate news, though, U.S. computer maker Hewlett-Packard Co said it expects its fiscal fourth-quarter earnings to beat Wall Street forecasts, and predicted a profit for the coming year that topped analysts' estimates.

Technology had been seen as an area particularly vulnerable to cutbacks in corporate spending, and HP's comments offset worries about the economic slump to help send U.S. stocks up at the opening. European shares turned flat after declines in Japan.

The economic crisis has spread steadily in recent weeks beyond major developed countries, with states from Ukraine and Iceland to Pakistan seeking help from the IMF.

"It is true to say that because of globalization the amount which the IMF is asking for is increasing, and increasing rapidly, and the list of countries asking for some support is increasing every day," IMF Managing Director Dominique Strauss-Kahn told a news conference on a visit to Libya.

He had said his organization was likely to need at least $100 billion in extra funding over the next six months to help countries out of the mire.

BONUSES CUT

Barclays, facing shareholder ire following a decision to take 5.8 billion pounds ($8.7 billion) from Middle East investors on terms tougher than the British government offered, canceled this year's executive bonuses, as U.S. investment bank Goldman Sachs and Swiss bank UBS have done.

It also said Qatar Holding LLC and Sheikh Mansour Bin Zayed Al Nahyan would each make up to 250 million pounds ($372.9 million) of reserve capital instruments available to existing shareholders -- effectively offering the prospect of enjoying some of the higher rates of return agreed to Gulf investors.

Japan's biggest bank, Mitsubishi UFJ Financial Group, announced its first-half profit dropped 64 percent and stuck to its recently lowered full-year forecast.

Australia's biggest investment bank, Macquarie Group, said it was heading for its first fall in annual profit in 17 years.

HSBC added to the employment gloom, saying it would cut a further 500 staff in Asia, mostly in Hong Kong, because of the weak economy and caution about next year.

INFLATION WANING

U.S. producer prices declined by a record 2.8 percent in October as energy prices slumped, showing inflation pressures receding sharply although a major measure of core inflation at the farm and factory gate rose more than forecast.

In Britain, already officially in recession, headline inflation dropped to 4.5 percent in October from 5.2 the previous month.

The larger than expected fall heightened expectations of a substantial cut in Britain's 3.0 percent interest rate next month to stimulate the economy and temper growing fears of deflation, following this month's dramatic 1.5 point cut.

Politicians are seeking ways of stimulating demand, including tax cuts and other measures.

Taiwan said it would issue shopping vouchers worth T$3,600 ($108) to its citizens. Premier Liu Chao-shiuan said the plan was expected to contribute 0.64 percent to GDP.[ID:nTPU000866]

In Washington, lawmakers argued over a proposal by Senate Democrats to use financial bailout funds for a $25 billion bailout loan for the auto industry.

Automakers have been hit by a collapse in consumer spending that was triggered by a housing crash and exacerbated by rising unemployment. Officials say even with major stimulus measures, it will take a long time for the U.S. economy to recover.

(Additional reporting by Reuters bureaus worldwide; Editing by Chizu Nomiyama)