TOPWRAP 1-U.S. sells record debt, China rate cut disappoints

* U.S. holds record-large 2-year Treasury note auction

* China shares fall 3 pct after relatively small rate cut

* Oil deepens losses below $40

* New Zealand falls deeper into recession

* Caterpillar, other firms slash spending as demand fades (For full crisis coverage, click [nCRISIS])