Renewed concern about the health of the U.S. financial sector put markets in a sour mood on Monday with U.S. stocks down nearly 2%.

The Dow Jones industrial average was most recently down 114 points to 7903, the S&P 500 was down 15 points to 827 and the Nasdaq was down 35 points to 1587. In Canada, the S&P/TSX composite index was down 130 points to 8935.

"As has tended to be the case with rallies over the past year, when the market has moved a fair amount higher, doubt starts to creep in," said David Jones, chief market strategist at IG Index. "There is always the worry that this is just another bear market rally - and no one wants to be left holding the baby when the market turns."

Market watchers say financial worries were generated by an analyst report from Calyon's Mike Mayo. The former Deutsche Bank analyst recently moved to Calyon and released his initial ratings on 11 U.S. banks. All of them were started with sell or underperform ratings and he said that, on average, banks have only marked down loans to 98 cents on the dollar.