* Global stocks plunge on fears credit crisis will widen
* Yen soars worldwide, dollar at 2-1/2-year trough vs yen
* Bonds gain on safety bid as global equities plunge
* Oil falls below $90 a barrel on slowing demand outlook (Recasts with U.S. markets, adds byline; changes dateline; previous LONDON)
By Herbert Lash
NEW YORK, Oct 6 (Reuters) - Fears of deepening bank problems in Europe and wider economic woes around the world slammed global equity markets and pushed oil prices lower on Monday, sending investors fleeing to safe-haven investments.
U.S. and euro zone government debt gained, gold futures jumped more than 5 percent and the yen soared across the board amid heavy selling of riskier positions.
Crude prices fell below $90 a barrel to their lowest in eight months at one point, before paring some losses, pressured by expectations energy demand will fall sharply due to slowing economic growth worldwide.
U.S. stocks slid at the open as the widening fallout from the credit crisis fueled jitters about the economy and corporate profits. European shares fell more than 5 percent.
"This is a stampede," said Valerie Plagnol, chief strategist at CM-CIC Securities in Paris.
Investors were unnerved by massive government intervention in capital markets in such a timespan, Plagnol said.
Although the cost of borrowing overnight funds on international money markets remained close to central banks' targets, thanks to continued liquidity injections, lending was almost nonexistent across all other maturities.
"The issue right now is to unclog the money market. As long as the money market is not functioning properly we are stuck in this situation," Plagnol said.
The Dow Jones industrial average <.DJI> plunged 405.88 points, or 3.93 percent, at 9,919.50, falling below 10,000 for the first time since October 2004. The Standard & Poor's 500 Index <.SPX> was down 53.97 points, or 4.91 percent, at 1,045.26. The Nasdaq Composite Index <.IXIC> was down 104.93 points, or 5.39 percent, at 1,842.46.
Before 10.30 a.m. in New York (1430 GMT), the FTSEurofirst 300 <.FTEU3> index of top European shares was down 6.9 percent at 1,014.26.
Three more European governments offered bank deposit guarantees as regulators from Washington to Seoul scrambled to contain the deepest global financial crisis in 80 years.
"The prevailing macro sentiment is now crystallizing around the notion that we are heading into a synchronized global slowdown, a mirror image of the across-the-board expansion we saw from 2004 to early 2007," said Edward Meir of broker MF Global.
U.S. light sweet crude oil
U.S. gold futures rose more than 5 percent as jittery investors flocked to bullion as a safe haven.
The gold contract for December delivery
The U.S. dollar jumped to a 13-month high against the euro and the yen rallied broadly. Sentiment soured sharply against the euro after leaders of Europe's four biggest economies decided against a coordinated plan at a weekend summit.
"The market is shunning the euro. The banking crisis (in Europe) seems to have taken the spotlight over the U.S. and the failure for European officials to come to an agreement on a coordinated type bailout weighed on the euro," said Ronald Simpson, director of global currency analysis at Action Economics in Tampa, Florida.
Against the yen, the dollar
The euro
The benchmark 10-year U.S. Treasury note
Asian stocks dropped overnight by about 5 percent and the yen surged to a 2-year high against the euro as investors doubted the U.S. and European response to the financial crisis could prevent a deeper slump in the global economy.
Japan's Nikkei share average <.N225> slumped 4.25 percent to close at its lowest since February 2004. MSCI's index of Asia-Pacific stocks outside Japan <.MIAPJ0000PUS> slid 6.6 percent to the lowest since December 2005. (Reporting by Chris Reese, Wanfeng Zhou and Frank Tang in New York and Jane Merriman, Joe Brock and George Matlock in London; Writing by Herbert Lash; Editing by James Dalgleish)