Financial stocks led the US market lower yesterday as investors locked in some gains from a month long rebound.

The Dow Jones industrial average dropped 77.50 points - or by 0.8 per cent - at 8,897.96 after recovering from a 130-point slide.

The Dow, which had not suffered a loss during the previous eight sessions, briefly bobbed to within 15 points of 9,000 during the first minutes of trading.

Broader stock indicators also gave back some of last week's gains, which pushed the market to highest level since late July.

Before Monday's profit-taking, the Dow had bounced about 1,500 points, or 20 per cent, since it slid below 7,500 on October 8.

The Standard and Poor's 500 fell 10.81 to 1,130.20, but the technology-heavy Nasdaq composite index rose 4.49 to 1,861.05.