NEW YORK - US STOCKS tumbled on Monday in their worst single-day loss in two months amid renewed concerns about the shakeout of the global financial crisis and conflicting signals about economic recovery

The Dow Jones Industrial Average slumped 200.95 points (2.35 per cent) to 8,338.78 in final trades as the blue-chip index extended losses after a nearly three percent drop last week.

The tech-dominant Nasdaq shed 61.28 points (3.35 per cent) to 1,766.19 while the broad-market Standard & Poor's 500 index shed 28.16 points (3.06 per cent) to a provisional close of 893.07.

A grim outlook by the World Bank and declining commodity prices led by oil added to nervousness investors returned to the market on Monday ahead of a two-day Federal Reserve policy meeting beginning on Tuesday.

'Stock indices ... are suffering losses of between two to three percent after the World Bank downwardly revised its expectations for the world economy in 2009,' analysts at Charles Schwab wrote in a note to clients.

The World Bank slashed its outlook for developing nations' economies on Monday, estimating growth at a meager 1.2 per cent this year while warning more measures were needed for a recovery to take hold.

The forecast amounts to steep drops from the previous two years.

Investors also had their eyes on the upcoming round of quarterly earnings reports and financial and other reforms prospects.

'The bulls are losing momentum on Wall Street,' said Joseph Hargett of Schaeffer's Investment Research.

He said that investors had 'little to cheer about' heading into the market on Monday, especially with a decision on US monetary policy due out of the Federal Open Market Committee.

The Federal Reserve's comments after the meeting are likely to offer clues on the timing and strength of an economic recovery. -- AFP