Stocks extended their sharp losses on Monday as insurer American International Group, which posted a record $61.7 billion quarterly loss, was bailed out with government money again, fueling fears that the global financial crisis is worsening.

The Dow Jones industrial average was down 246.83 points, or 3.49 percent, at 6,816.10. The Standard & Poor's 500 Index was down 29.65 points, or 4.03 percent, at 705.44. The Nasdaq Composite Index was down 48.00 points, or 3.48 percent, at 1,329.84.

(Editing by James Dalgleish)