Global stock markets were down across the board and oil sank below $50 a barrel Thursday as concerns over the ailing U.S. auto industry, a 16-year high in U.S. unemployment and the Dow Jones' lowest closing price since 2003 weighed on investors' minds.

The benchmark Dow -- which finished the previous session below 8,000 points for the first time in five years -- slipped further in early trading Thursday, shedding 128 points in early trading before recovering a little, down 55 at 12.20 p.m. ET (1720 GMT). The Nasdaq and S&P were also down.

Gloomy economic forecasts and market misery have impacted heavily on oil since it reached an alltime high of $147.27 a barrel in mid-July.

Crude briefly dipped to $49.91 in electronic trading on the New York Mercantile Exchange Thursday before settling just above $50. The industry fears the economic slowdown will drastically curb demand for oil.

Meanwhile the number of Americans filing for unemployment insurance surged to its highest levels in 16 years, the U.S. Department of Labor said Thursday.

The number of initial filings for state jobless benefits increased by 27,000 to 542,000 for the week ending November 15, according to government figures.

In a statement, White House press secretary Dana Perino said U.S. President George W. Bush was in favor of legislation being considered in Congress to extend benefits for the jobless.

"The recent financial and credit crisis has slowed the economy, and it's having an impact on job creation," Perino said. "The president is always concerned when anybody loses their job and wants to ensure that anybody who wants to work can find employment."

More than four million Americans were collecting unemployment benefits in the week ending November 8 -- the highest figure in 26 years.

In Europe, major indexes spent the day skulking well short of their opening prices. London's FTSE 100 was down more 130 points at the close or 3.2 percent. Both Paris' CAC and Frankfurt's DAX were also down more than 3 percent.

The selloff was more brutal still in Asia and Pacific markets, where Tokyo's Nikkei index shed 6.9 percent.

The Japanese market slumped as the country's Finance Ministry announced a yen 63.9 billion ($663 million) trade deficit in October -- the first for the month in 28 years -- after a slowing global economy cut into the nation's exports.

Seoul's KOSPI index dropped 6.7 percent on the day, while Australia's All Ordinaries index closed 4.3 percent lower and Hong Kong's Hang Seng index fell 4 percent.

"The market is fearful of the fallout from the credit crisis and the global economic slowdown," said Todd Salamone, market strategist at Schaeffer's Investment Research.

Investors are grappling with a possible bankruptcy in the automotive industry, something analysts say could have dire implications for the broader economy, as a second day of congressional hearings ended without resolution.

"The crisis of confidence is back on the front page," said Todd Morgan, senior managing director of Bel Air Investment Advisors, a Los Angeles-based firm with nearly $6 billion in assets under management.

"You need some positive catalyst, something, to change the attitude of investors [and] the auto debate is hurting confidence."