* Global stocks slump as credit market strains persist
* Investor uncertainty spurs safety bid in government debt
* Euro nears 13-month low vs dollar after Trichet comments
* Oil falls; focus shifts to slower demand, rising supply
* Gold dips 4 percent, silver 12 percent, platinum 5 pct (Recasts with U.S. markets, adds byline; changes dateline; previous LONDON)
By Herbert Lash
NEW YORK, Oct 2 (Reuters) - A new batch of weak U.S. data drove fears of slower global growth, driving stocks around the world and oil sharply lower on Thursday, even as the U.S. Congress worked toward passing a revised bill to rescue the ailing financial sector.
U.S. and euro zone government debt rose in a renewed safe-haven rally as reports on jobless claims and factory activity led economists to say the United States was in recession.
The dollar rose to its highest level in over a year against the euro after European Central Bank President Jean-Claude Trichet said inflation risks in the euro zone have eased, opening the door to the ECB's first rate cut in five years.
Investor confidence ebbed and commodity prices tumbled amid the bleak economic picture painted by the latest U.S. data, despite the U.S. Senate's approval late on Wednesday of a revised $700 billion plan to bail out banks holding bad debt.
The deteriorating economic outlook led investors to dump gold and other precious metals as the dollar firmed. Oil fell more than $4 to settle just under $94 a barrel.
The Senate's approval of the rescue plan initially reassured European stock markets, but U.S. stocks fell sharply on the economy and on jitters over passage of the bailout, with the broad S&P index closing down 3 percent.
The grim U.S. news dragged down stock markets throughout Latin America, as well as Europe, led by a more than 7 percent drop in Brazil's blue-chip Bovespa index.
The U.S. government reported the number of people filing for new jobless benefit claims rose to a seven-year high in the latest week and factory orders showed a steeper-than-expected drop in August.
The data shows how much damage the credit crisis has cast on the U.S. and global economies, said Alan Lancz, president of Alan B. Lancz & Associates Inc in Toledo, Ohio.
"It's almost a perfect storm and it's starting to hit home," Lancz said.
The Dow Jones industrial average <.DJI> closed down 348.62 points, or 3.22 percent, at 10,482.45. The Standard & Poor's 500 Index <.SPX> shed 46.81 points, or 4.03 percent, at 1,114.25. The Nasdaq Composite Index <.IXIC> lost 92.68 points, or 4.48 percent, at 1,976.72.
Economic bellwethers were hard hit on Wall Street.
General Electric
Insurance stocks, led by Hartford Financial
European stocks fell on the U.S. economic data, knocking down mining and industrial stocks.
ArcelorMittal
The FTSEurofirst 300 <.FTEU3> index of top European shares closed 1.3 percent lower at 1,058.81 points, after being ahead earlier in the session. The index is down 30 percent in 2008.
"The U.S. is tipping into recession," said Marc Touati, economist at Global Equities in Paris, who held out a bit of hope that all was not lost. "But we're getting to the end of the tunnel on the credit front, and if the rescue plan goes through, it will certainly help the economy."
Money market stress eased in Europe but lending rates for overnight loans among banks remained above central bank targets, reflecting a strong aversion to counterparty risk and how economic strains are making lending costlier.
The U.S. commercial paper market contracted dramatically for a third straight week as business lending and borrowing effectively shut down, Federal Reserve data showed Thursday.
The overnight rate for the London interbank offered rate in dollars
But longer maturity rates jumped, with benchmark three-month rates -- which now cover the year-end period -- fixed higher in dollars and euros.
The benchmark 10-year U.S. Treasury note
Gold fell more than 4 percent as investors sold bullion to cover losses on other markets. Silver plunged more than 12 percent in sympathy, while platinum shed over 5 percent to its weakest level since January 2006 after U.S. carmakers reported a fresh drop in auto sales in September on Wednesday.
December gold futures
The dollar rose against a basket of major currencies, with the U.S. Dollar Index <.DXY> up 1.04 percent, but against the yen, the dollar
The euro
Oil fell as turmiol in financial markets stoked concerns about fuel demand and sent investors seeking safer havens.
U.S. crude
Asian stocks fell. The MSCI index of Asia-Pacific stocks outside Japan <.MIAPJ0000PUS> fell 1.2 percent, while Tokyo's Nikkei average <.N225> dropped 1.9 percent to end at its lowest close in three years. (Reporting by Ellis Mnyandu, John Parry, Nick Olivari in New York; Jane Merriman, Jan Harvey, Emelia Sithole-Matarise and Kevin Plumberg in London and Blaise Robinson in Paris; Writing by Herbert Lash; Editing by Leslie Adler)