US STOCKS-Market extends losses on Bernanke bank comment

(Updates with market extending losses)

NEW YORK, Feb 28 (Reuters) - U.S. stocks extended losses, sending the Dow and the S&P 500 down more than 1 percent, after Federal Reserve Chairman Ben Bernanke said there probably will be bank failures as the housing slump takes its toll.

The Dow Jones industrial average .DJI was down 124.31 points, or 0.98 percent, at 12,569.97. The Standard & Poor's 500 Index .SPX was down 12.65 points, or 0.92 percent, at 1,367.37. The Nasdaq Composite Index .IXIC was down 19.26 points, or 0.82 percent, at 2,334.52. (Editing by Kenneth Barry)