Stocks fell on Monday as the Dow opened below 7,000 for the first time since October 1997 and a $61.7 billion quarterly loss at embattled insurer American International Group fueled worries the already deep financial crisis is worsening.

The Dow Jones industrial average <.DJI> dropped 122.74 points, or 1.74 percent, to 6,940.19. The Standard & Poor's 500 Index <.SPX> slid 13.98 points, or 1.90 percent, to 721.11. The Nasdaq Composite Index <.IXIC> fell 19.23 points, or 1.40 percent, to 1,358.61.

(Editing by James Dalgleish)