Stocks fell on Monday as savers demanded their money back from embattled British bank Northern Rock, adding to global credit concerns before an expected U.S. interest rate cut this week.

JPMorgan Chase & Co and Citigroup Inc led U.S. financial stocks lower, tracking Asian and European banking stocks, as fears over widening financial market turmoil grew.

Thousands of customers withdrew savings from Britain's fifth-biggest mortgage lender after it sought emergency funding from the Bank of England on Friday. Northern Rock's shares plunged 34 percent on Monday.

The U.S. central bank is widely expected to lower rates on Tuesday to cushion the U.S. economy from the financial turmoil. The Federal Reserve has not lowered rates by more than 25 basis points at a single meeting in almost five years, but this time some analysts feel a deeper cut is needed.

The market is lower because of the Northern Rock news, especially in view of the Fed meeting tomorrow, said Gail Dudack, chief investment strategist at Dudack Research Group in New York.

The Northern Rock news shows that these financial problems are not just in the U.S. There is always worry about contagion.

The Dow Jones industrial average was down 32.11 points, or 0.24 percent, at 13,410.41. The Standard & Poor's 500 Index was down 8.26 points, or 0.56 percent, at 1,475.99. The Nasdaq Composite Index was down 21.10 points, or 0.81 percent, at 2,581.08.

Microsoft Corp shares fell 1.1 percent to $28.72, dragging on both the S&P and the Nasdaq after it suffered a decisive antitrust defeat in Europe on Monday.

The ruling also gives European Commissioner Neelie Kroes a green light to pursue other antitrust cases and complaints involving Intel Corp, Qualcomm Inc and Rambus Inc and to issue draft antitrust guidelines that were put on ice pending the ruling. Qualcomm shares fell 1 percent to $39.02.

Former Federal Reserve Chairman Alan Greenspan said on Monday that chances the U.S. economy will fall into recession have risen as a result of the prolonged housing slump, and that increasing inflationary pressures will make monetary policy a lot more difficult.

In further fallout from the subprime mortgage losses, Merrill Lynch & Co Inc said its subprime lending unit, First Franklin Financial Corp, is cutting jobs. Merrill's shares fell 2.4 percent to $72.79.

Shares of General Motors Corp rose 1.7 percent to $34.81. Negotiators for the United Auto Workers and GM agreed to a break in contract talks after a 16-hour bargaining session that raised expectations the two sides were near an agreement.

JPMorgan Chase shares fell 1.2 percent to $45 and Citigroup fell 1.5 percent to $45.96.

Major investment banks Lehman Brothers, Morgan Stanley, Bear Stearns and Goldman Sachs, will be closely watched ahead of reporting earnings this week that are expected to have taken a big hit from turmoil in the mortgage markets.

The four companies' shares all fell between 1.9 percent and 2.6 percent.

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