DJIA Leaders & Laggards: MRK AA

The Dow Jones industrial average ended sharply lower on Monday, with drug maker Merck & Co. posting the largest percentage loss, following an analyst downgrade.

UBS analyst Roopesh Patel downgraded shares of Merck to "Neutral" from "Buy" and said U.S. sales of its Gardasil vaccine may disappoint investors. Shares declined $1.85, or 4.8 percent, to $36.60.

The blue-chip index declined 56.58 to 11,231.96, following a cautious economic outlook from San Francisco Federal Reserve President Janet Yellen, who said it will take time for financial markets to improve. The Dow tumbled as low as 11,120.74, its lowest trading level since Aug. 15, 2006.

Shares of financial stocks declined, and Bank of America Corp. slipped 87 cents, to 3.9 percent, to $21.53, and set a seven-and-a-half-year low of $21.10 during the session.

Shares of JPMorgan Chase & Co. declined $1.27, or 3.6 percent, to $34.04.

On the rising side, Alcoa Inc.'s stock gained 61 cents to $33.39. The Pittsburgh-based aluminum maker reports quarterly results on Tuesday.

Shares of International Business Machines Corp. gained $1.96 to $121.50.

Shares of Hewlett-Packard Co. rose 56 cents to $44.