NEW YORK, Oct 28 (Reuters) - U.S. stocks extended losses on Wednesday, with the Nasdaq down 2 percent, as disappointing new home sales data prompted worries about a lack of catalysts to extend the current seven-month rally.
* Data showed sales of newly built single-family homes fell 3.6 percent last month, their first drop since March, prompting investors to doubt the strength of the recovery in consumer sentiment and the housing sector.
* The Nasdaq fared worse than the other two major indexes as Apollo Group Inc shed more than 18 percent after it said federal regulators launched an informal inquiry into its revenue recognition practices. At least three brokerages downgraded the company.
* The Dow Jones industrial average fell 67.56 points, or 0.68 percent, to 9,814.61. The Standard & Poor's 500 Index lost 14.57 points, or 1.37 percent, to 1,048.84. The Nasdaq Composite Index gave up 43.24 points, or 2.04 percent, at 2,072.85.
(Reporting by Leah Schnurr; Editing by Kenneth Barry)