By Jeremy Pelofsky and Langi Chiang
WASHINGTON/BEIJING (Reuters) - President-elect Barack Obama sought the remaining half of $700 billion (476 billion pounds) in U.S. financial bailout funds from Congress, and sinking company earnings and weak Chinese trade figures underlined the depth of the global recession.
Sony Corp is expected to post its first operating loss in 14 years this business year, a source said, and aluminium producer Alcoa Inc. kicked off the Wall Street earnings season with a wider-than-expected quarterly loss.
As politicians worldwide try to alleviate slowing growth and mounting job losses, Obama said he had asked President George W. Bush to request formally the remaining bailout funds so they could be ready when he takes office on January 20.
"I felt that it would be irresponsible for me, with the first $350 billion already spent, to enter into the administration without any potential ammunition should there be some sort of emergency or a weakening of the financial system," Obama said.
The $700 billion rescue programme was approved in October to bolster the financial industry plagued by bad mortgage debts that toppled brokerage Lehman Brothers and pushed several other major institutions to the brink of collapse.
Germany's ruling coalition reached agreement on Monday on a 50 billion euro stimulus package focussed on infrastructure and education and aimed at helping Europe's largest economy through what could be its worst post-war recession.
The mixture of investment spending and tax cuts includes incentives for new car purchases, officials said.
Chinese exports and imports fell in December for the second month in a row, data on Tuesday showed. Imports were down 21.3 percent while exports fell 2.8 percent from year-earlier levels -- a small fall compared with declines of 42 percent and 17.4 percent reported by neighbours Taiwan and South Korea.
Ma Xiaoping, an economist with HSBC in Beijing, said she expected China's exports to fall at an annual rate of about 20 percent in coming months -- in contrast to the 17.2 percent increase in 2008.
"Just look at the plunge in exports in Taiwan and South Korea," she said. "Chinese exporters are in a similar position to them, and you can't expect China to do a great job while everybody else is in trouble."
Underscoring the global reach of the crisis, ratings agency Standard and Poor's warned of a possible downgrade to New Zealand's foreign-currency debt.
WEAK RESULTS
European shares were lower in early trade with the FTSEurofirst 300 index down 1.22 percent as of 8:33 a.m. British time.
Germany's biggest listed retailer Metro reported slightly weaker-than-expected 2008 sales hit by negative currency effects and a weaker Christmas.
The biggest retailer, Tesco, reported its smallest rise in Christmas sales since the early 1990s.
Tesco posted a rise of 2.5 percent in sales at stores open for at least a year excluding fuel for the seven weeks to January 10, edging a Reuters poll which expected a rise of 2.4 percent on average.
Asian indexes followed U.S. stocks lower, with Tokyo's Nikkei, which was closed for a holiday on Monday, falling more than 4 percent.
Citigroup shares fell 17 percent after a Wall Street Journal report the bank might post a quarterly operating loss of at least $10 billion.
Alcoa, which is slashing 15,000 jobs, posted a net loss of $1.19 billion for the fourth quarter on lower demand and declining metal prices.
"The aluminium industry was caught up in a perfect storm ... prices have never fallen so fast," President and Chief Executive Officer Klaus Kleinfeld told analysts.
In Japan, Sony shares fell more than 8 percent on reports of its likely loss. A source close to the matter told Reuters the maker of Bravia flat TVs and Playstation 3 video game consoles may post an operating loss of about $1.1 billion for the year to end-March.
A record rise in Japanese bank lending in December showed that companies struggled to raise cash in the commercial paper and bond markets as they had in the past and had instead been forced to borrow directly from banks.
"Corporate executives are very worried because their cashflow is clearly dwindling," said Hideo Kumano, chief economist at Dai-ichi Life Research Institute.
In South Korea, No. 5 automaker Ssangyong Motor Co suspended production at all of its factories as some suppliers stopped delivering parts worried over payment as the company fights to stave off bankruptcy.
A government survey showed Japan's service sector sentiment tumbled to a record low in December, marking a deepening recession in the world's second largest economy.
In Britain a trio of surveys on Tuesday suggested the economy had entered its deepest recession since at least the 1980s.
The world's top central bankers, meeting in Switzerland on Monday, said the major economies were expected to shrink this year, but would recover in 2010.
The OECD, meanwhile, said its leading indicator for the Group of Seven big industrial nations fell, pointing to "deep slowdowns in the major seven economies and in major non-OECD member economies, particularly China, India and Russia.
(Additional reporting by Mark Potter in London; Kerstin Gehmlich in Berlin; Kentaro Hamada, Sachi Izumi, Tetsushi Kajimoto and Hideyuki Sano in Tokyo; Jeff Mason in Washington and Steve James in New York; Writing by Alex Richardson and Jason Neely; Editing by Elizabeth Piper)
