New York  - US stocks closed lower Monday, extending a worldwide decline and amid investors' concerns that Wall Street is recovering too fast.

China led the decline, with the Shanghai Composite Index falling 6.7 per cent, the most since June 2008, amid worries that a slowdown in lending will stifle growth.

"China and the US are very economically linked right now," Michael Binger, a Minneapolis-based fund manager at Thrivent Asset Management, told Bloomberg News. "The stock markets are going to move together."

Despite Monday's weak session and fears of a turbulent September, the Dow Jones Industrial Average and Standard and Poor's 500 Index had their best August performance in eight years. For the month, the Dow gained about 3.5 per cent, the S&P500 about 3.3 per cent and Nasdaq 1.5 per cent.

Bank stocks retreated - while Citigroup was down 4 per cent, Morgan Stanley fell 2 per cent and insurance giant AIG shed 12 per cent.

Monday's big acquisition news was Walt Disney Co's decision to buy Marvel Entertainment for 4 billion dollars, giving the family entertainment conglomerate a powerful squad of movie superheroes such as Spider-Man, the X-Men, The Incredible Hulk and The Fabulous Four.

The blue-chip Dow Jones Industrial Average slipped 47.92 points, or 0.50 per cent, to 9,496.28. The broader Standard and Poor's 500 Index fell 8.31 points, or 0.81 per cent, to 1,020.62. The technology-heavy Nasdaq Composite Index dropped 19.71 points, or 0.97 per cent, to 2,009.06.

The US currency climbed against the euro to 69.78 euro cents from 69.91 euro cents on Friday and dropped against the Japanese currency to 92.96 yen from 93.60 yen. (dpa)