U.S. and European stocks fell, extending losses from the first weekly decline for global equities in more than a month, as the World Bank said the recession will be deeper than previously forecast. Treasuries rose, while a drop in commodities sent oil below $68 a barrel.

Bank of America Corp., the biggest U.S. bank, lost 2.8 percent as two board members resigned. Exxon Mobil Corp., BP Plc and Alcoa Inc. retreated as a strengthening dollar reduced the demand for currencies as an inflation hedge. Apple Inc. advanced 1.4 percent after saying it sold more than 1 million iPhone 3G S models through yesterday.

The Standard & Poor's 500 Index lost 1.2 percent to 909.87 at 9:35 a.m. in New York after sinking 2.6 percent last week. The Dow Jones Industrial Average dropped 75.65 points, or 0.9 percent, to 8,464.08. Europe's Dow Jones Stoxx 600 tumbled 1.7 percent and the MSCI World Index, which fell 3 percent last week for its first weekly loss since May 15, slipped 1.4 percent.

"The worries are still out there," said John Wilson, who helps oversee $120 billion as chief market technician at Morgan Keegan & Co. in Memphis, Tennessee. "Nobody is ready to get the trumpets out and herald the end of the recession."

Equities and commodities retreated after the World Bank forecast today the global economy will contract 2.9 percent this year. That compares with a prior estimate of a 1.7 percent decline. Growth is expected to return next year with a 2 percent expansion, lower than the 2.3 percent prediction about three months ago.

'Remain Weak'

Federal Reserve officials on June 24, at the conclusion of their two-day meeting, may say the U.S. is showing signs of emerging from the worst recession in a half century. Following their last meeting in April, policy makers said the economy will "remain weak for a time." The central bankers will also keep the benchmark interest rate in the range of zero to 0.25 percent, economists said.

Executives at U.S. companies are taking advantage of the biggest stock-market rally in 71 years to sell their shares at the fastest pace since credit markets started to seize up two years ago. Insiders of S&P 500 companies were net sellers for 14 straight weeks as the gauge rose 36 percent, data compiled by InsiderScore.com show.

Bank of America dropped 2.8 percent to $12.85. The lender that took $45 billion in U.S. aid said board members Tommy Franks and Joseph Prueher resigned, pushing the total of departing directors to seven since April.

Commodity Shares Slump

Exxon retreated 1.3 percent to $70.11. Crude oil fell for a second day in New York, slipping as low as $67.50 a barrel, on concern that fuel demand will remain depressed.

Alcoa, the largest U.S. aluminum producer, lost 3.5 percent to $10.61. Copper slumped on concern China, the world's largest user, may buy less and as gains by the dollar damped demand for commodities. Aluminum, zinc, lead and nickel also declined.

Apple added 1.4 percent to $141.38. Piper Jaffray & Co. predicted sales of about 750,000 after initially forecasting 500,000 in the debut weekend. Apple also said 6 million people have downloaded its new iPhone 3.0 software in the five days it's been out.

Apple Chief Executive Officer Steve Jobs had a liver transplant about two months ago, a person familiar with the matter said. Jobs, a cancer survivor, went on medical leave in January after saying he wanted to take himself out of the limelight and focus on his health. Apple should disclose whether he had a liver transplant if he returns to work this month in the role of CEO, corporate governance experts said.

The S&P 500 lost 2.6 percent last week, its first drop in more than a month, as a decline in crude oil hurt fuel producers and Standard & Poor's downgraded the credit ratings of 18 banks.

$12.8 Trillion

The S&P 500 has still rebounded 35 percent from its 12-year low on March 9 and commodity and credit markets have recovered after the government and Fed pledged $12.8 trillion to end the recession. The rally left the index valued at 14.50 times its companies' earnings, near the highest level since October, according to Bloomberg data.

The Libor-OIS spread, which measures banks' willingness to lend, has narrowed to 37 basis points, from a record 364 basis points in October.

Treasuries advanced for a second day as the World Bank forecast made it more likely the Fed will keep interest rates near zero for longer. Traders reduced bets the central bank will raise borrowing costs, according to futures on the Chicago Board of Trade.

The Fed is scheduled to purchase Treasuries due from December 2013 to April 2016 today, as part of plan to lower borrowing costs and revive the economy. Policy makers may signal at a meeting on June 24 that the Fed will buy more debt, said Akira Takei, a manager at the international bond investment department at Mizuho Asset Management Co. in Tokyo.

The U.S. government will auction $104 billion of two-year, five-year and seven-year securities this week. That's $3 billion more than the last sale of similar-maturity notes.