American stocks fell for the first time in five days after Wachovia Corp. ousted its chief executive officer and Standard & Poor’s lowered its debt ratings on three of Wall Street’s biggest securities firms.

Wachovia slid to the lowest level since 1995 after saying Kennedy Thompson will step down, reigniting concern that subprime losses will deepen. Morgan Stanley, Merrill Lynch & Co., and Lehman Brothers Holdings Inc. tumbled after S&P said the firms will be forced to report more writedowns. Marriott International Inc. spurred declines in consumer shares as the largest hotel chain said lower American demand is hurting revenue growth.

“Everyone’s trying to pick the bottom in financials, and what the news flow is showing you is that we’re not there yet,” a New York-based money manager at Sentinel Asset Management, which oversees about $5 billion, Paul Kandel, said. “Certainly the changing command at Wachovia isn’t helpful and the downgrades aren’t helpful.”

Banks and brokerages started their retreat today after British lender Bradford & Bingley Plc warned that the housing market is deteriorating in Great Britain and Treasury Secretary Paulson predicted that it will take “months” before financial-market turmoil ends. Financial shares have led the S&P 500’s 11% decline from a record in October as writedowns and credit losses stemming from the subprime-mortgage market’s collapse approach $400 billion worldwide.

Nine of 10 industry groups in the S&P 500 fell yesterday, with 423 companies in the index posting losses.

Wachovia fell 40 cents, or 1.7%, to $23.40 after Thompson’s ouster signaled the company may report a second-quarter loss. Chairman Lanty Smith was appointed interim CEO, the lender said in a statement that cited “a series of previously disclosed disappointments and setbacks” for the change. Mr. Thomson joins half a dozen CEOs at financial companies, including Citigroup Inc. and Merrill, who lost their jobs after the global credit crunch.

Morgan Stanley, the second-biggest American securities firm by market value, was lowered to A+ from AA-, S&P said. Merrill Lynch, the third-biggest firm, was cut to A from A+, as was Lehman Brothers, the fourth-biggest. Goldman Sachs Group Inc., the largest of the group, was affirmed at AA-. The outlook on all four New York-based companies remains negative, S&P said.