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Asia Stocks Sink As US Faces Fiscal Crunch

News out of Europe also unnerved markets. Leaders warned that unemployment could remain high for years, and the European Commission cut its forecasts for the region's economic growth through 2013. German industrial orders fell by more than expected in September, portending possible tough times ahead for Europe's largest economy.

Debt- and recession-mired Greece took a step forward with parliament's passage of an austerity bill that will further slash pensions and salaries.

Approval of the cuts and tax increases worth ⿬13.5 billion ($17 billion) over two years was a big step for Greece's efforts to secure the next installment of its international rescue loans and stave off imminent bankruptcy.

The country's international creditors have demanded that the bill and the 2013 budget, due to be voted on Sunday, pass before they consider releasing an already delayed ⿬31.5 billion installment from Greece's ⿬240 billion bailout. Without it, Greece will run out of money on Nov. 16.

Among individual stocks, weak quarterly earnings drove down South Korean construction firms, Yonhap News Agency said. No. 1 Hyundai Engineering & Construction fell 4.8 percent and GS Engineering & Construction plummeted 10.9 percent.

Also being watched by investors is Thursday's opening of China's Communist Party congress â¿¿ the once-in-a-decade forum to name China's top leadership. Markets will be looking for hints on how the new leadership plans to tackle the nation's economic slowdown.

Wall Street saw its sharpest sell-off of the year. The Dow Jones industrial average plunged 2.4 percent to 12,932.73. The S&P 500 fell 2.4 percent to 1,394.53. The Nasdaq composite index lost or 2.5 percent to 2,937.29.

Benchmark oil for December delivery was up 47 cents to $84.91 per barrel in electronic trading on the New York Mercantile Exchange. The contract fell $4.27 to close at $84.44 a barrel in New York on Wednesday.

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