Wall Street extended last week's losses Monday, as market worries amounted after former Federal Reserve Chairman Alan Greenspan warned of a possible U.S. recession.

    Greenspan in televised interview Sunday warned that the U.S. stagflation saw a growing possibility, when prices rise at the same time as the economy cools, and there was a 50-50 chance of a U.S. recession.

    The Fed offered a 20-billion-dollar Federal Reserve credit auction Monday, aiming to encourage commercial banks to borrow from the central bank, and in turn, boost commercial banks' lending to businesses and consumers. The central bank will not release the results until Wednesday, but investors felt unconvinced that the auction would be a solution.

    The central bank has been trying to lift the market confidence and has cut the interest rates for three times since the summer, but investors still fretted over the housing and credit market.

    In addition to the trouble on the housing market, the Fed also worried about the U.S. economic slowdown and the inflation, after the U.S. wholesale prices and Consumer Price Index in November this year saw the highest gain in 34 years and two years, separately.

    Moreover, the New York Federal Reserve Bank Monday reported the Empire State Index of manufacturing fell to 10.3 in December from 27.4 in November, indicating slow growth.

    The U.S. Commerce Department said the U.S. current account deficit narrowed in the third quarter to 178.5 billion dollars, or 5.1%, of gross domestic product.

    The Dow Jones fell 172.65, or 1.29 percent, to 13,167.20, finishing at its low of the session. Broader stock indicators also declined. The Standard & Poor's 500 index dropped 22.05, or 1.50 percent, to 1,445.90, and the Nasdaq composite index fell 61.28, or 2.32 percent, to 2,574.46.