U.S. automakers seek plan; Europe looks to bolster banks

Markets were mixed, with U.S. stocks rising as much as 2 percent in the wake of Monday's stunning losses. European shares were in and out of positive territory and Japan's stock market tumbled.

Congress has demanded a turnaround plan from struggling U.S. automakers before lawmakers reopen debate on a US$25 billion bailout the industry says it needs to survive.

The automakers' proposals come on the same day they are slated to release November sales results, which are expected to down about 35 percent from last year and near the lowest annual rate in 25 years.

The car industry around the world has been reeling from flagging demand and evaporating consumer credit, forcing automakers to slash production to cut swelling inventories.

Toyota Motor Corp said it would chop management bonuses by 10 percent as it cuts back production in the face of collapsing sales.

In the financial sector, the European Commission promised measures to get state-aided banks to start lending to the real economy but EU finance ministers squabbled over plans to counter the downturn.

HOW LOW CAN THEY GO?

Australia slashed interest rates and other countries are expected to follow this week. Australia's Reserve Bank cited the perilous state of the world economy when it cut the benchmark cash rate a full percentage point to 4.25 percent.

The Bank of Japan kept its key rate at 0.30 percent at an emergency meeting to deal with a cash squeeze on Japanese companies, which face slumping export markets.

However, it unveiled 3 trillion yen (US$32 billion) in new measures help corporate funding. The BOJ will accept a wider range of corporate debt, including for the first time debt with a triple-B rating, as collateral and launch a new scheme to make it easier for banks to make loans to companies.

Britain, the euro zone and New Zealand will almost certainly cut interest rates later this week. In addition to more rate cuts, the U.S. Federal Reserve is weighing other responses with its benchmark rate nearing zero.

Fed Chairman Ben Bernanke said on Monday further cuts in the U.S. benchmark rate below 1 percent were feasible.

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