North American markets fell Monday, as hawkish comments from U.S. Federal Reserve chairman Ben Bernanke convinced investors that interest rates were headed up.

The S&P/TSX composite index dropped 199.20, or 1.67%, to 11,699.49.

Bernanke told an international monetary conference that inflation remains a concern and the central bank would take a vigilant stand on rates.

Nine of the 10 TSX main sub-groups were down.

The energy index fell 2.04% despite higher oil prices. Crude for July delivery closed up 27¢ at US$72.60 a barrel.

Petro Canada lost $1.09, or 2.13%, to $50.01 CAD.

The materials index fell 2.46% even though the August gold contract rose $7.70 at US$648.70 an ounce.

Yamana Gold Inc. shed 30¢, or 2.67%, to $10.94.

The TSX financials sector was off 1.19%. Manulife Financial Corp. was off 42¢, or 1.14%, to $36.42.

The Canadian dollar was down 0.29 cent to US90.54¢.

The S&P/TSX Venture composite index fell 26.75 points, or 0.94%, to 2,830.23.

In New York, the market was lower most of the session, but fell significantly after Bernanke’s comments.

The Dow Jones industrial average fell 199.15 points, or 1.8%, to 11,048.72, the Nasdaq composite index lost 49.78 points, or 2.24%, to 2,169.62, while the S&P 500 declined 22.93 points, or about 1.8%, to close at 1,265.29.