China to spur economy; European figures bleak

Industrial output sank in several European economies in October, and analysts said November and December would be even worse in the latest signs the global financial crisis has shoved leading economies into recession or slowdown.

"Industrial output in the euro zone has fallen into a very deep recession, suggesting that GDP in Q4 could contract even more sharply in Italy, France and Germany than is currently assumed," said Holger Schmieding, a Bank of America economist.

Economists in one survey expect U.S. GDP to shrink 1.1 percent next year.

Some solace came from progress in talks to rescue the ailing U.S. auto industry, though a deal once thought possible on Monday has been drawn out.

The House of Representatives could vote as early as Wednesday on a US$15 billion plan to bail out and restructure U.S. automakers but the initiative may face possible roadblocks in the Senate, officials said.

Hopes for auto rescue plan helped propel Wall Street higher. The Dow and the S&P 500 were up about 0.8 percent each. European stocks were flat after Japanese shares closed 3.2 percent higher.

One drag on the market was Eastman Kodak, whose stock was down 5 percent after the photography company said 2008 earning would fall short of expectations.

Otherwise the corporate world was still shedding jobs in response to dwindling demand.

Global miner Rio Tinto said it was eliminating 14,000 jobs, and Sweden's SKF, the world's biggest bearings maker, announced 2,500 job cuts.

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