New York  - Major US stock indices fell sharply on Thursday as investors prepared for another dismal jobs report and China dampened speculation of a new stimulus package to boost its export- based economy.

Chinese Premier Wen Jiabao promised to maintain economic growth of about 8 per cent but did not offer additional funds beyond a 586- billion-dollar economic recovery package announced in November as he opened the annual National People's Congress (NPC).

Shares in metals and construction companies rallied Wednesday on speculation that China was planning a new government stimulus.

Financial shares in the United States were also hit by fresh fears that some banks may have to be nationalized, while Moody's Investors Service said it may reduce JPMorgan Chase & Co's credit rating.

Shares of General Motors Corp also fell 15 per cent after its auditor said there was "substantial doubt" that the carmaker could survive the economic crisis.

Unemployment figures for February are due to be released Friday. Economists are expecting the loss of another 650,000 jobs, which would be the most since 1949, according to a Bloomberg News survey.

The blue-chip Dow Jones Industrial Average tumbled 281.40 points, or 4.09 per cent, to 6,594.44. The broader Standard & Poor's 500 Index plunged 30.32 points, or 4.25 per cent, to 682.55. The technology-heavy Nasdaq Composite Index plummeted 54.15 points, or 4 per cent, to 1,299.59.

The US currency rose against the euro to 79.71 euro cents from 78.99 euro cents on Wednesday, but the dollar fell against the Japanese currency to 97.96 yen from 98.98 yen. (dpa)