New York  - A rating agency's action to downgrade debts from three of the largest US securities firms sparked a decline in financial services stocks that led Wall Street lower Monday.

Standard & Poor's downgraded bonds from Morgan Stanley, Merrill Lynch and Lehman Brothers. The rating agency cited "prospects of continued weakness in the investment banking business and the potential for more write-offs, though not of the magnitude of those of the past few quarters."

The blue-chip Dow Jones Industrial Average lost 134.5 points, or 1.06 per cent, to 12,503.82. The broader Standard & Poor's 500 Index fell 14.71 points, or 1.05 per cent, to 1,385.67. The technology- heavy Nasdaq Composite Index dropped 31.13 points, or 1.23 per cent, to 2,491.53.

The US currency edged up against the euro to 64.337 euro cents from 64.29 euro cents on Friday. The dollar declined against the Japanese currency to 104.54 yen from 105.51 yen on Friday. (dpa)