Updated from 4:26 p.m. EDTFinancials dragged stocks in New York sharply lower Monday as traders tried to digest a series of deals, another round of earnings and what the CEO of one major bank called "extremely difficult challenges." The Dow Jones Industrial Average lost 289.60 points, or 3.6%, to 7841.73, with all 30 components in negative territory, while the S&P 500 shed 37.21 points, or 4.3%, to 832.39. The Nasdaq gave up 64.86 points, or 3.9%, to 1608.21. Immediately after the close, IBM ( IBM) reported a first-quarter profit that was slightly better than expectations, but sales were light. Shares lost 0.8% in the regular session and were down 2.6% in the post market. Movers of the day included Sun Microsystems ( JAVA), which surged 36.8% to $9.15 on merger news. However, the bulk of the notable winners and losers were on the downside. Citigroup ( C) and Bank of America ( BAC) were off by 19.5% and 24.3%, respectively. The KBW Bank Index fell 15.4%.