Global markets slump on gloomy outlook

(CNN) -- World markets slumped across the board Tuesday, following the latest round of disappointing economic news.

Europe's most influential markets -- in London, Paris and Frankfurt -- all closed down with the Germany's DAX 30 falling more than 5 percent.

The Dow Jones industrial average, Standard & Poor's 500 and Nasdaq 100 all closed between 2 and 2.2 percent down, according to early tallies.

Automakers and financial services were particularly hard hit in U.S. trading amid worries about their solvency and looming recession.

Earlier, Japan's Nikkei index dropped 3 percent, with Australia's All Ordinaries index off 3.4 percent.

The results were similar in Seoul, where the KOSPI fell about 2 percent, while Singapore's Straits Times index was down 4.2 percent.

Oil also hit a 19-month low Tuesday, sliding below the psychologically important $60 level, as investors focused on weak global demand and a stronger dollar.

Light, sweet crude for December delivery fell $3.08 to settle at $59.33 a barrel in New York. Tuesday's decline brings the price to its lowest level since March 21, 2007, when it settled at $59.61 a barrel.

The price of oil has fallen about 60 percent from July's all-time high above $147 a barrel on fears that global economic weakness will continue to undermine demand for gasoline and other petroleum products.

Global stock markets had rallied Monday after China unveiled a $586 billion stimulus package that investors hoped would help the world economy stave off a deep recession.

Recession worries trumped China's stimulus plan in the United States, where stocks slumped in trading Monday. The Dow Jones Industrial Average dropped 0.8 percent, the Standard & Poor's 500 index fell 1.3 percent and the Nasdaq composite shed 1.9 percent.

Bad company news fueled the drop -- Circuit City filed for bankruptcy, package delivery firm DHL announced 9,500 layoffs as it ends air and ground operations in the United States and Starbucks reported lower earnings than expected.

The U.S. Labor Department said that 1.2 million jobs had been eliminated in 2008 in the United States.