Wall Street falls as techs and banks weigh

NEW YORK (Reuters) - Stocks fell on Monday as tech companies were hurt by concern over waning consumer spending and financials stumbled ahead of results from Goldman Sachs and Morgan Stanley.

With the holiday shopping season in full swing, fears about weak consumer spending dragged on shares of Apple . Goldman Sachs cut its rating on the iPod maker and its shares fell nearly 4 percent.

"In general with Apple, there is concern in regard to demand with the consumer," said Bennett Gaeger, managing director at Stifel Nicolaus in Baltimore.

Aside from worries about potential heavy losses from Goldman Sachs and Morgan Stanley, JPMorgan Chase was the Dow's biggest drag. It fell 6.3 percent to $29.00, after Merrill Lynch downgraded the bank's stock and forecast a fourth-quarter loss.

Shares of General Motors and Ford rose, however, on hopes that a financial lifeline could still materialize, though analysts noted uncertainty on any government aid package weighed on the overall market.

The Dow Jones industrial average <.DJI> fell 105.53 points, or 1.22 percent, to 8,524.15. The Standard & Poor's 500 Index <.SPX> lost 14.25 points, or 1.62 percent, to 865.48. The Nasdaq Composite Index <.IXIC> gave up 40.71 points, or 2.64 percent, at 1,500.01.

Investors were also looking ahead to an interest rate decision from the Federal Reserve on Tuesday, with expectations that the Fed -- the U.S. central bank -- will further cut rates at its regularly scheduled monetary policy meeting in an effort to push more money into the sputtering U.S. economy.

The S&P financial index <.GSPF> declined 3.3 percent. Goldman Sachs Group Inc gave up 2.6 percent at $65.96 ahead of results expected on Tuesday. Goldman is expected to post its first quarterly loss since going public in 1999.

Morgan Stanley , which also reports results this week, was down 3 percent at $13.43.

Sentiment was also hurt by the fallout from the alleged $50 billion fraud surrounding Wall Street trader Bernard Madoff. More banks revealed exposure, including Royal Bank of Scotland , Man Group and Nomura <8604.T>.

U.S. lawmakers over the weekend said they expect the White House to act soon to head off a potential collapse in the industry, but President George W. Bush said an announcement on a rescue for the struggling industry was not imminent, highlighting continuing uncertainty over its fate.

Shares of GM rose 5.6 percent to $4.16, while Ford gained 3.3 percent to $3.148.

On Nasdaq, Apple fell 4 percent to $94.40, while Oracle Corp was down 3.7 percent at $16.22.

Housing and building companies also dragged the market, following news that Developers Diversified Realty Corp , which owns and manages shopping centers, that it had not yet reached an agreement to sell 13 assets and the deal would not close in December as the company previously hoped. Shares dropped 14.9 percent to $4.84.

(Additional reporting by Deepa Seetharaman)