The markets started the week on the downside with a bearish analyst note on the banking sector.

The Dow Jones Industrial Average lost 41.74, or 0.52%, to 7,975.85, while the S&P 500 fell 7.02, or 0.93%, to 835.48. The Nasdaq was off 15.16, or 0.93%, to 1,606.71.

Melissa Lee, the moderator of CNBC's "Fast Money" TV show, said the market managed to reverse steep losses to close near the highs of the day, with defense and auto stocks leading the way.

"You have to respect the price action, because there was every reason for the market to sell off hard," said Jeff Macke.

Joe Terranova said the trading session was rather slow and dull, adding the only thing that mattered was gold, which he warned, is gone as a safe haven trade.

Zachary Karabell said gold is going to do what it's going to do as more people pour money into risk assets and equities.

Lee shifted the discussion to the decline in financial stocks, which she attributed to a negative note on the U.S. banking sector by Mike Mayo, an analyst with Calyon Securities, who initiated coverage of the sector as underweight. Among other things, he said banking loan losses will exceed those of the Great Depression.

Lee said there was nothing new in the report. Macke agreed, saying that there was "nothing in the report that we haven't heard 1,000 times." He added banking stocks are not going to return to their old lows.

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