Stocks fell on Monday on anxiety that a possible global flu outbreak could derail the economy's efforts to climb out of a recession.

Governments around the world moved to contain the spread of a possible swine flu outbreak, as a virus that has killed over 100 people in Mexico spread to the United States and Canada and may have reached as far as New Zealand.

The Amex Airline Index <.XAL> shed 10.1 percent as investors worried that travel would be hit be the flu fears. Among the laggards, UAL Corp , the parent of United Airlines, gave up 14 percent at $5.52, while Continental Airlines Inc lost 16 percent to $11.12.

Chevron Corp and Exxon Mobil Corp were the Dow's biggest weights as June oil future slid more than 5 percent on flu worries. Chevron was down 2 percent at $65.29, and Exxon gave up 1 percent at $65.86.

It puts pressure on travel activity and global economic activity, said David Bianco, chief U.S. equity strategist at UBS in New York.

But Bianco added that after an impressive run that has sent the broad S&P up more than 27 percent from the bear market lows in March, investors might be taking the opportunity to lock in profits.

The Dow Jones industrial average <.DJI> fell 29.39 points, or 0.36 percent, to 8,046.90. The Standard & Poor's 500 Index <.SPX> lost 4.32 points, or 0.50 percent, to 861.91. The Nasdaq Composite Index <.IXIC> was down 8.51 points, or 0.50 percent, at 1,685.78.

The CBOE Volatility Index <.VIX>, considered to be Wall Street's fear gauge, rose 6.1 percent to 39.05.

General Motors Corp unveiled plans to close plants, cut hourly workers and dealers and eliminate its Pontiac brand as it tries to secure the government funding it needs to stay in business. Shares surged 21.3 percent to $2.05.

Jitters over what a government stress test of 19 major financial institutions might reveal pressured financial stocks, with the KBW Bank index <.BKX> off 1.7 percent. Wells Fargo & Co fell 3 percent to $20.75 after influential analyst Richard Bove downgraded the bank to hold from buy.

Cell-phone chip supplier Qualcomm Inc was a bright spot on the Nasdaq, up 7.1 percent at $44.29 after it swung to a quarterly loss but raised its full-year revenue target on signs of market improvement.

Also on the earnings front, Dow component Verizon Communications Inc , the No. 2 U.S. phone company, posted higher-than-expected profits, helped by its purchase of a smaller rival and growth in cell-phone customers. Verizon's shares were down 1.4 percent at $30.55.

Whirlpool Corp shares jumped 13.4 percent to $46.18 after the world's biggest appliance maker reported a surprise profit as cost-cutting offset a slump in global sales.

(Reporting by Leah Schnurr; editing by Jeffrey Benkoe)