WASHINGTON - PAIN from the credit crisis intensified in the auto sector on Tuesday on news of calamitous sales drops in the US and Brazil, while EU finance ministers gave lukewarm backing to fresh stimulus plans.

Embattled US automaker General Motors reported a 41 per cent drop in November domestic sales as it prepared to return to Washington to press lawmakers for a multibillion-dollar bailout.

The automaker blamed the global economic crisis and credit freeze for its poor results and estimated that total demand for all brands in the US market fell by more than 34 per cent in November.

GM said US auto sales are now at their lowest rate in at least 50 years on a per capita basis.

'Every manufacturer is posting awful numbers and we are no exception,' said Mr Mark LaNeve, vice-president of North America vehicle sales, service and marketing.

The research firm Autodata said US sales were down 36.7 per cent from a year ago and at the lowest level since 1982.

Ford Motor Co. reported a 31 per cent drop and Chrysler said US sales plunged 47 per cent.

The Big Three submitted plans to Congress for their survival and requests for emergency aid. GM said it needs up to 18 billion dollars (S$27.5 billion), while Ford requested as much as nine billion and Chrysler asked for seven billion in loans.

House of Representatives speaker Nancy Pelosi said on Monday that bankruptcy for US automakers 'is not an option' and that a short-term loan program 'is an appropriate way to go'. 'I believe an intervention will happen, either from the administration or legislatively,' she said.

'I think it's pretty clear that bankruptcy is not an option. It takes too long. What bankruptcy achieves in a year we can do in a matter of weeks, that's why the short-term loan is an appropriate way to go.'

Problems emerged in Brazil after two years of fast-paced growth for the auto sector.

New car registrations in November fell 30 percent compared with the same month in 2007, the national car dealers federation Fenabrave said.

At the same time, according to the Folha de Sao Paulo daily, 47,000 auto workers - nearly half the total 113,000 in the country - have been put on mandatory vacation by companies, which have cut monthly production by more than 60 per cent as stocks of unsold vehicles pile up.

In Brussels, finance ministers from all 27 European Union countries met to discuss proposals by the European Commission for a stimulus plan totaling 200 billion euros, equivalent to 1.5 per cent of EU gross domestic product.

Luxembourg's Jean-Claude Juncker, who serves as both prime minister and finance chief, insisted that the figure, disputed by eurozone ministers on Monday, was less important than that 'everyone agrees with the general direction'.

But differences were evident. Germany is taking a more cautious line than France and Britain.

The ministers said in a document agreed at the meeting that they only 'in principle' welcomed the European Commission's proposed stimulus package.

Elsewhere, renewed gloom about the depth and length of the downturn pulled the price of oil below 46 dollars a barrel in London, the lowest level for nearly four years.

There were also worrying signs that the powerhouse Chinese economy is slowing dramatically.

The yuan fell by its maximum daily trading limit for a second consecutive day on Tuesday.

The sudden drop in the value of the Chinese currency may signal a policy shift to prop up exports during the financial crisis, analysts said.

'I have never before seen a financial system that has been in pain for so long,' said Mr Chuo Mitsui Trust Bank strategist Yosuke Hosokawa. 'Markets are wondering whether the negative situation will deepen further'.

Elsewhere, the Latvian government said it may raise its stake in Parex, the nation's second-largest bank which is already being taken into state hands, as authorities slapped restrictions on cash withdrawals.

In Russia, Prime Minister Vladimir Putin pledged 10.5 billion rubles (S$546.2 billion) in support for small businesses to help them through the economic crisis.

After brutal losses in the US and European stock markets on Monday, Asian bourses suffered a similar fate but most other markets rebounded.

The Dow Jones Industrial Average rallied 270.00 points (3.31 per cent) to close at 8,419.09, coming off a horrific 679-point loss on Monday.

The Nasdaq composite climbed 3.70 per cent to 1,449.80 and the Standard & Poor's 500 added 3.99 per cent to 848.81, after both fell more than eight percent on Monday.

In London, the FTSE 100 index of leading shares closed 1.41 per cent higher.

The Paris CAC 40 gained 2.35 per cent and in Frankfurt the DAX jumped 3.12 per cent.

Mr John Wilson, equity strategist at Morgan Keegan, said the stock market may be able to sustain a rally even with the economy mired in recession.

'The market will begin to look through the trough well before we or the economists see it, so the fact that we are in a recession doesn't preclude the stock market forming a major low in here,' he said in a note to clients.

Earlier, Tokyo plunged 6.35 per cent and Hong Kong by 5.0 per cent. -- AFP