US auto woes weigh on global stocks

US auto woes weigh on global stocks

London: World stocks and oil fell on Wednesday while government bonds and the yen gained as US automakers begged for a bailout from Washington, adding to evidence that the credit crisis is crippling the real economy.

US auto executives warned Congress on Tuesday that their industry was teetering on the brink of disaster as they pleaded for a $25 billion aid package.

The bailout proposal for General Motors, Ford Motor and Chrysler LLC failed to gain traction in the Senate amid doubts over whether the government should be spending yet more taxpayer money on corporate rescues.

“There’s a lot of worry about the possible bailout of the Big Three carmakers in the US, since it doesn’t seem to be coming together well at all, and this is keeping investors from buying," said Katsuhiko Kodama, senior strategist at Toyo Securities in Tokyo.

US crude oil fell 1% to $53.74 a barrel, hitting its lowest in almost two years and falling more than $90 from its July record peak.

The yield on two-year US Treasuries fell to a five-year low of 1.122% as investors sought safer government bonds. December bund futures rose 55 ticks to hit their highest level since March 2006 while Japanese government bonds also rose.

The yen rose to 96.66 per dollar as investors chased the low-yielding currency. The dollar was steady against a basket of major currencies.