Corporate America suffered another grim day yesterday as Circuit City, the electrical retailer, filed for bankruptcy protection, DHL announced almost 10,000 job losses and shares in General Motors sank to their lowest level since 1946.

The announcements provided new evidence that the credit crisis that has engulfed the financial sector for a year has now infected the rest of corporate America. Circuit City, the second-biggest electronics retailer in the United States, filed for Chapter 11 protection and said that it would dismiss a fifth of its workforce.

Circuit City admitted that it had been taken off-guard by the speed of the consumer slowdown. It said that big electronics companies had effectively pulled the plug on it by withdrawing credit lines and insisting that they be paid up front.

At the same time, shares in General Motors sank to their lowest level since just after the end of the Second World War. The fall came after Deutsche Bank said it thought the shares, trading at $3.39 yesterday, were worthless.

Over the weekend, Barack Obama, who won the presidential election last week, joined Nancy Pelosi, the Speaker of the House of Representatives, in pleading with the Treasury to allow car companies to benefit from Washington’s $700 billion bailout.

Their request came after Rick Wagoner, chief executive of General Motors, said that the car manufacturer was burning through its cash reserves so rapidly that they would be gone by the end of the year.

DHL, the parcel delivery company owned by Deutsche Post, said that it was pulling a key part of its business out of the US and would not offer any American domestic postal services. It also admitted that it was shedding 9,500 workers in America.

The round of redundancies will help to propel America’s unemployment rate, which is rising astonishingly quickly. The Labour Department last week said that 6.5 per cent of the American workforce was out of a job. Economists forecast that more than 7 per cent would be unemployed by Christmas.

Last night, American Express was given fast-track approval by the Federal Reserve to turn itself into a bank. The move – which mimics Goldman Sachs and Morgan Stanley – means that the credit card giant is guaranteed access to cheap emergency funds from the US central bank.

Yesterday, the Government also announced a second, bigger bailout of AIG, the insurer, worth $150 billion (£96 billion) after it slumped to a $24.4 billion third-quarter loss.

Fannie Mae, the mortgage finance group, reported an even bigger loss, of $29 billion, in the third quarter. The lender has now repossessed so many homes that it owns 67,519 dwellings, equivalent to a town the size of Dayton, Ohio.

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