Stocks decline most since November amid Italian elections

Renewed concerns about the economies in Europe and the approaching sequester situation took a toll on stock prices Monday.

The Dow Jones Industrial Average fell 216.40 points to 13,784.17, its biggest one-day decline since Nov. 7, the day after the presidential election. The Nasdaq Composite Index dropped 45.57 points to 3,116.25 and the S&P 500 Stock Index was down 27.75 points to 1,487.85.

On the day, the S&P 500 fell 1.8 percent, the Nasdaq lost 1.5 percent and the Dow was down 1.4 percent.

The markets will await two days of testimony by Federal Reserve Board Chairman Ben Bernanke on Tuesday and Wednesday. He is expected to discuss the mandatory cuts in federal government spending and the overall state of the U.S. economy.

Commodity prices avoid the selloff on Monday. Gold gained $13.80 to $1,586.6o an ounce. Oil added two cents to $93.11 a barrel.

Chesapeake Energy Corp. (NYSE: CHK) slumped 6.8 percent after agreeing to sell a stake in an Oklahoma oilfield to China Petrochemical Corp. (NYSE: SNP) for less than one-third of its estimated value. ITT Educational Services Inc. (NYSE: ESI) tumbled 17 percent after disclosing that U.S. regulators subpoenaed documents related to private loan programs for its students.

“We don’t want to see more chaos out of Europe,” Bruce McCain, chief investment strategist at the private-banking unit of KeyCorp in Cleveland, said in a phone interview. His firm oversees more than $20 billion. “Any question about whether or not Italy would be committed to austerity measures after the elections gets investors concerned.”

Stocks erased gains on concern Italy may be left with a hung parliament as partial election results suggested Silvio Berlusconi may have built a blocking minority in the Senate to deny victory to Pier Luigi Bersani. Bersani, who led in opinion polls throughout the two-month race, campaigned to maintain the budget rigor of outgoing Prime Minister Mario Monti. Bets Japan’s Prime Minister Shinzo Abe will nominate a central bank chief who favors stimulus pushed stocks higher earlier Monday.

This week’s March 1 deadline to avoid automatic U.S. spending cuts may get investors’ attention. It marks another fiscal showdown between President Barack Obama and congressional Republicans. If Congress doesn’t act, federal spending will be reduced by $85 billion in the final seven months of this fiscal year and by $1.2 trillion over the next nine years.

The S&P 500 has gained 4.3 percent this year as U.S. lawmakers agreed on a compromise on taxes in January and amid better-than-estimated corporate earnings. About 75 percent of the S&P 500 companies that have released quarterly results beat profit estimates, according to data compiled by Bloomberg. The index trades at 14.7 times reported earnings, below the average since 1954 of 16.4.

“Continued earnings momentum and rising corporate confidence suggest improved capital spending this year,” said James Paulsen, the chief investment strategist at Minneapolis- based Wells Capital Management, which oversees about $325 billion.

Dynavax Technologies Corp. (Nasdaq: DVAX) dropped 32 percent to $2.01. The drugmaker seeking to bring its first product to market fell after U.S. regulators rejected the company’s hepatitis B vaccine.

Affymax Inc. (Naasdaq: AFFY) sank 85 percent to $2.42 after the drugmaker and partner Takeda Pharmaceutical Co. voluntarily recalled an anemia treatment for kidney dialysis patients after reports of three fatal reactions.

Hertz Global Holdings Inc. (NYSE: HTZ) gained 31 cents to $19.04. Adjusted earnings per share for 2013 will rise to $1.82 to $1.92, on sales of as much as $10.95 billion, the Park Ridge, N.J. based company said Monday in a statement. Analysts projected $1.73 a share on revenue of $10.6 billion, the average of estimates compiled by Bloomberg.

BlackBerry (Nasdaq: BBRY), formerly known as Research In Motion Ltd., added 0.5 percent to $13.25. Sales of BlackBerry 10 devices are above the company’s “ambitious” expectations and production has been increased, chief executive officer Thorsten Heins told Frankfurt Allgemeine.

Barnes & Noble Inc. (NYSE: BKS) added 11 percent to $15.06 after Chairman Leonard Riggio said he will offer to buy the stores and website of the chain he founded more than 40 years ago as it struggles to navigate the rising popularity of digital books.

Zynga Inc. (Nasdaq: ZNGA) rose 7.5 percent to $3.43. The biggest maker of online social games surged on optimism that other U.S. states may follow Nevada in legalizing real-money gambling over the Internet.

CME Group Inc. (Nasdaq: CME), the world’s largest futures exchange, has approached Deutsche Boerse AG to consider beginning talks on a merger, according to four people familiar with the situation.