NEW YORK (CNNMoney.com) -- Stocks opened lower Monday morning, with the Dow falling below 7,000 for the first time since October 1997, after American International Group reported a massive quarterly loss and a restructuring of its bailout by the government.

The Dow Jones industrial average (INDU) was down 96 points, or 1.4%, to 6,966 points, 20 minutes after the opening bell. The S&P 500 (SPX) index slid 11 points, or 1.5% to 724 points. The Nasdaq composite (COMP) was down 0.7%.

Both the Dow and S&P are hovering at their lowest levels in about 12 years, as the market remains anxious about the state of the global economy and the world financial system.

"There's a buyer's strike right now in the stock market," said Art Hogan, chief market strategist at Jefferies & Co.

He blamed the decline in futures on "ongoing concerns about the global recession," noting that the European indexes were down 3% to 4%.

Asian markets closed lower, with Tokyo's Nikkei down 3.8%.

AIG: AIG (AIG, Fortune 500), whose status as a Dow component may be in jeopardy, reported a worse-than-expected $61.7 billion loss for the fourth quarter of 2008.

The company blamed "severe credit market deterioration," particularly in mortgaged-back securities, as well as charges from ongoing restructuring activities.

In addition, the insurer and the government announced a restructuring of the $150 billion bailout agreement. Key components included the government's decision to commit another $30 billion to the firm in exchange for cumulative preferred stock, and an exchange of an existing $40 billion preferred shares stake for shares that more closely resembles common stock.

Shares of AIG were indicated to open up 10 cents at 52 cents, bucking the market-wide plunge.

Dave Rovelli, managing director for Canaccord Adams, said investors were unhappy with the government's $30 billion "donation" to AIG, because there are no expectations that the government will ever get its money back.

"How is [AIG] going to pay it back?" said Rovelli. "With what? There's no way in God's name that [the government] is going to recoup the money they've lent them."

Economy: Before the opening bell, the government released the personal income and spending data for January. Personal income rose 0.4%, beating expectations of a 0.2% decline, according to a consensus of economic opinion from Briefing.com.

Personal spending rose for the first time in seven months, up 0.6%, which was higher than the 0.4% increase expected by Briefing.com consensus.

After the open, the Institute for Supply Management issues in February report on manufacturing. The purchasing managers' index is expected to have declined to 34 from 35.6 in January, remaining deep in recessionary territory.

Also after the open, a government report on construction spending is expected to show a 1.5% drop in January after a 1.4% swoon in the previous month.

Job cuts: Europe's leading bank, HSBC (HBC), said Monday that it would cut 6,100 jobs, all of them in the United States. The bank also said it would close most of the branches of its U.S.-based consumer lending businesses, HFC and Beneficial.

In addition, the bank announced a full-year profit of $5.7 billion, down 70% from $19.1 billion in 2007. HSBC stock fell more than 20% in pre-market trading.

Buffett: Investor Warren Buffett's Berkshire Hathaway (BRK.A) reported the worst results in the 44 years he has run the company, and only the second decline in net worth in that time. In his report to shareholders Saturday, Buffett said Berkshire's net worth fell in 2008 by $11.5 billion.

Oil and money: Oil fell $2.15 to $42.61 in electronic trading. The dollar was lower against the euro and pound, but higher versus the yen.