Stocks extended losses on Monday with the Nasdaq falling more than 2 percent as worries about the U.S. budget talks and the euro zone debt crisis sent a shudder through markets.

The Dow Jones industrial average <.DJI> was down 172.97 points, or 1.37 percent, at 12,484.23. The Standard & Poor's 500 Index <.SPX> was down 25.12 points, or 1.87 percent, at 1,318.68. The Nasdaq Composite Index <.IXIC> was down 59.25 points, or 2.07 percent, at 2,800.56.

(Reporting by Angela Moon; Editing by James Dalgleish)