Governments around the world scrambled for new measures to contain the fast-spreading credit crisis as stock, bond and commodity markets bet on deepening uncertainty and a sharp downturn.

The US Treasury has launched the first stage of its bank rescue plan, requesting bids for managers of troubled mortgages and mortgage-backed securities.

Our North America correspondent, Kim Landers, reports it's been another traumatic day on Wall Street, with the Dow Jones plummeting by a new record amount.

Anxiety about the spreading financial crisis sent the Dow Jones industrial average down 800 points during trading, a new record for a one day drop.

It then bounced back, closing down almost 370 points to just below the 10,000 mark, its lowest close since November 2004.

Meanwhile, a new survey of business economists show most believe the US is in, or entering a recession.

The survey by the National Association for Business Economics also shows they believe the recession will last roughly a year.

Australian market
The Australian sharemarket has hit a three year low after global stockmarkets plunged overnight.

Local stocks have lost nearly three per cent, with the All Ordinaries index down 133 points to 4,412.

The Australian dollar has hit a four-year low of about 70 US cents after a one-day fall of seven cents, but a short time ago was trading higher at 72.28 cents.

The Commonwealth Bank's Chief Currency Strategist Richard Grace says financial markets are panicking about the outlook for global economic growth.

"And when financial markets go into a panic, the Australian dollar tends to get oversold," he said.

All sectors are in the red on the sharemarket - but energy stocks are leading the sell off with Woodside down more than seven per cent.

The ASX 200 has shed 121 points to 4,420.

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