UPDATE 1 - Obama urges swift U.S. action on markets

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ASHEVILLE, N.C., Oct 6 (Reuters) - Democratic presidential candidate Barack Obama on Monday urged the Bush administration to move swiftly to address the financial crisis, saying contagion was spreading.

"Not only are we seeing the stock market go down but there is still a great danger of the credit markets locking up and we've seen that contagion is spreading to all parts of the globe," Obama told reporters in Asheville, where he is preparing for Tuesday's debate against Republican John McCain, his rival in the Nov. 4 election.

"It is very important for (Treasury) Secretary (Henry) Paulson and Federal Reserve Bank Chairman (Ben) Bernanke to move swiftly and try to restore confidence as quickly as possible," Obama said.

Obama also called for a new economic stimulus package and the extension of unemployment insurance and said the government must address structural problems in the economy including in the housing market.

Congress failed to extend unemployment benefits and pass a stimulus package in a vote on Sept.26.

(reporting by Mark Egan, editing by Andrew Quinn)