And the Wall Street Journal reports on the messy Italian election results, "Italy Vote Brings Political Gridlock":
ROME—In a national election meant to push Italy further down a path of economic reform, voters delivered political gridlock that could once again rattle Europe's financial stability.More at Business Week, "In Italy's Disarray, Berlusconi Emerges Anew as a Power." And at the Economist, "Italian politics: A dangerous mess."
Markets fell in response to returns. Yields on 10-year Italian bonds jumped 0.45 percentage point in mid-morning trading to 4.81%, their highest level this year. Spanish yields were higher by nearly 0.2 percentage point, and bonds of Portugal and Greece were hit as well. Bond yields rise when their prices fall.
In early trading, stock markets in France, Germany, Spain and Italy were each down around 2%. Hardest hit was the Italian benchmark, which traded down around 4%. Italian banks suffered particularly. UniCredit SpA fell sharply.
The Dow Jones Industrial Average swung nearly 300 points Monday, ending with its worst day in almost four months, as the prospects of a stable government appeared to drop.
A majority of voters endorsed parties that had promised to tone down or even reverse the financial sacrifices Italy has promised its European partners, giving surprise lifts to both the center-right coalition of former premier Silvio Berlusconi and a party of protest led by a former comedian.
Early Tuesday, the left-wing coalition led by the Democratic Party's Pier Luigi Bersani appeared to have gained a razor-thin victory in the lower house of parliament over the center-right coalition headed by Mr. Berlusconi—29.6% to 29.2%, final data from the Interior Ministry showed. By leading the vote count in the lower house, the Democratic Party will automatically get the majority of 340 out 630 seats and, therefore, will likely receive the mandate to form a government.
he Senate, however, appeared headed for political impasse. The Democratic Party was the leading vote-getter in the upper house as well, by less than one percentage point. But its 31.6% result fails to provide its coalition with a majority to pass legislation. If a new government isn't able to guarantee clear parliamentary support, Italians could return to the polls within months.
Battle lines were already being drawn late Monday. The Democratic Party declared slim victories in both houses, saying it will keep Italy's interests in mind during this "very delicate situation for the country." But a top official in Mr. Berlusconi's center-right coalition said he is asking the country's interior minister to call the vote a draw.
The apparent stalemate reflects the groundswell of support for former comedian Beppe Grillo's Five-Star Movement. His throw-the-rascals-out platform drew enough voters to give it nearly as many votes as Italy's mainstream coalitions—25.6% in the lower house, according to final data from the Interior Ministry, making it the single largest party in that house.