Stocks fell on Monday as a downgrade of Citigroup, the No. 1 U.S. bank, fueled a sell-off in shares of financial services companies on renewed worry about mounting credit losses.

Shares of Citigroup led decliners on both the Dow and the S&P 500 after Goldman Sachs cut the stock to a sell and said the bank may have to write off $15 billion for debt losses over the next two quarters.

The S&P financial index fell 1.5 percent as shares of other banks, including Bank of America Corp and JPMorgan Chase & Co slid in sync with Citigroup.

The market is still trying to come to grips with the amount of damage that's coming out of the financials and how much exposure is overseas too, said Marc Pado, U.S. market strategist at Cantor Fitzgerald & Co. in San Francisco.

It's more uncertainty, and uncertainty is bad for the market.

The Dow Jones industrial average was down 78.20 points, or 0.59 percent, at 13,098.59. The Standard & Poor's 500 Index was down 10.30 points, or 0.71 percent, at 1,448.44. The Nasdaq Composite Index was down 13.17 points, or 0.50 percent, at 2,624.07.

Citigroup shares fell 3.4 percent to $32.85 on the New York Stock Exchange, while shares of Bank of America, the No. 2 U.S. bank, declined 2 percent to $43.51.

Shares of JPMorgan, the No. 3 U.S. bank, shed 1.6 percent to $42.41.

Investors also got hit by more disappointing news on the housing front after Lowe's Cos. Inc, the No. 2 U.S. home improvement chain, slashed its full-year profit outlook.

Lowe's dropped 4.3 percent to $23.93 on the NYSE, while among homebuilders, shares of luxury home builder Toll Brothers declined 2.5 percent to $20.73.

(Editing by Kenneth Barry)