US STOCKS-Wall St falls 4 percent after factory data

(Updates with reaction to manufacturing data)

NEW YORK, Dec 1 (Reuters) - U.S. stocks extended losses on Monday as a report showing further contraction in a gauge of manufacturing activity added to worries about the deepening world economic slump.

Fears that the start of the 2008 holiday shopping season could herald the bleakest year-end season for retailers added to the negative tone, along with a slide in financial shares.

The Dow Jones industrial average .DJI was down 361.12 points, or 4.09 percent, at 8,467.92. The Standard & Poor's 500 Index .SPX was down 42.15 points, or 4.70 percent, at 854.09. The Nasdaq Composite Index .IXIC was down 67.09 points, or 4.37 percent, at 1,468.48. (Reporting by Ellis Mnyandu; Editing by Kenneth Barry)