Stock futures tick higher ahead of GDP, jobless data


NEW YORK (Reuters) - Stock index futures edged modestly higher on Thursday as investors were reluctant to make big bets following a sharp two-day rally and ahead of a rash of data.


Investors will also be keeping an eye on the debate in Washington over sequestration - U.S. government budget cuts that will take effect starting on Friday if lawmakers fail to reach an agreement on spending and taxes. President Barack Obama and Republican congressional leaders arranged to hold last-ditch talks to prevent the cuts, but expectations were low that any deal would be produced.


Major indexes posted their biggest daily gains since early January on Wednesday, putting the S&P 500 back above the closely watched level of 1,500. Over the past two sessions, the index has gained 1.9 percent, lifted by strong data and comments from Federal Reserve Chairman Ben Bernanke that showed continued support for the Fed's stimulus policy.


Wall Street has largely resisted predictions it would undergo a correction, with the S&P up 6.3 percent so far this year and the Dow Jones industrial average within striking distance of an all-time high. While markets suffered steep losses earlier this week on concerns over European debt, they have since recovered and are flat on the week.


Revised gross domestic product data is expected to show that the U.S. economy grew 0.5 percent in the fourth quarter, rather than contracted 0.1 percent as initially estimated. The data is due at 8:30 a.m. (1330 GMT)


Weekly jobless claims, also on tap for 8:30 a.m., are seen dipping by 2,000 to 360,000 in the latest week, while the February Chicago PMI is seen dipping to 54.3 from 55.6 last month.


Those reports come in the wake of strong pending home sales data Wednesday and a proxy for business spending plans that was more robust than expected, which added to the positive tone in markets.


S&P 500 futures rose 2.7 points and were above fair value, a formula that evaluates pricing by taking into account interest rates, dividends and time to expiration on the contract. Dow Jones industrial average futures added 16 points and Nasdaq 100 futures rose 4.5 points.


J.C. Penney Co Inc shares slumped 15 percent to $18.01 in premarket trading a day after it reported a steep drop in sales, prompting the department store to overhaul its pricing strategy.


Groupon Inc also reported revenue that missed expectations, sending shares down 26 percent to $4.41 before the bell.


Salesforce.com Inc and Gap Inc are on tap to report results later Thursday.


With 93 percent of the S&P 500 companies having reported results so far, 69.5 percent have beaten profit expectations, compared with a 62 percent average since 1994 and 65 percent over the past four quarters, according to Thomson Reuters data.


Fourth-quarter earnings for S&P 500 companies are estimated to have risen 6.2 percent, according to the data, above a 1.9 percent forecast at the start of the earnings season.


Tim Cook, chief executive of Apple Inc , acknowledged widespread disappointment Wednesday in the performance of the tech titan's stock, which is down 16.5 percent so far this year, but urged investors to take a long-term view on the company.


(Editing by Bernadette Baum)



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Jennifer Aniston & Justin Theroux's Wedding Planning Underway









02/27/2013 at 07:50 AM EST



She conquered the Oscars, and now Jennifer Aniston is preparing for another very big day.

The actress, 44, is in the process of planning her wedding to screenwriter-actor Justin Theroux, 41 – and she has already checked off some major tasks on her to-do list, including choosing wedding bands, setting a date and narrowing down dresses.

Just don't expect the wedding, which is likely to take place soon after Aniston wraps her current film in Connecticut on March 8, to be a lavish production.

"It will be a small affair with their closest friends," a source close to Aniston tells PEOPLE in this week's cover story.

In the meantime, the bride-to-be is enjoying life with her future groom.

"Jen seems more confident than ever," says the source, "and they've become a great team."

For much more on Aniston and Theroux's wedding plans, their romantic Oscar night and look inside their relationship, pick up this week's issue of PEOPLE

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Advanced breast cancer edges up in younger women


CHICAGO (AP) — Advanced breast cancer has increased slightly among young women, a 34-year analysis suggests. The disease is still uncommon among women younger than 40, and the small change has experts scratching their heads about possible reasons.


The results are potentially worrisome because young women's tumors tend to be more aggressive than older women's, and they're much less likely to get routine screening for the disease.


Still, that doesn't explain why there'd be an increase in advanced cases and the researchers and other experts say more work is needed to find answers.


It's likely that the increase has more than one cause, said Dr. Rebecca Johnson, the study's lead author and medical director of a teen and young adult cancer program at Seattle Children's Hospital.


"The change might be due to some sort of modifiable risk factor, like a lifestyle change" or exposure to some sort of cancer-linked substance, she said.


Johnson said the results translate to about 250 advanced cases diagnosed in women younger than 40 in the mid-1970s versus more than 800 in 2009. During those years, the number of women nationwide in that age range went from about 22 million to closer to 30 million — an increase that explains part of the study trend "but definitely not all of it," Johnson said.


Other experts said women delaying pregnancy might be a factor, partly because getting pregnant at an older age might cause an already growing tumor to spread more quickly in response to pregnancy hormones.


Obesity and having at least a drink or two daily have both been linked with breast cancer but research is inconclusive on other possible risk factors, including tobacco and chemicals in the environment. Whether any of these explains the slight increase in advanced disease in young women is unknown.


There was no increase in cancer at other stages in young women. There also was no increase in advanced disease among women older than 40.


Overall U.S. breast cancer rates have mostly fallen in more recent years, although there are signs they may have plateaued.


Some 17 years ago, Johnson was diagnosed with early-stage breast cancer at age 27, and that influenced her career choice to focus on the disease in younger women.


"Young women and their doctors need to understand that it can happen in young women," and get checked if symptoms appear, said Johnson, now 44. "People shouldn't just watch and wait."


The authors reviewed a U.S. government database of cancer cases from 1976 to 2009. They found that among women aged 25 to 39, breast cancer that has spread to distant parts of the body — advanced disease — increased from between 1 and 2 cases per 100,000 women to about 3 cases per 100,000 during that time span.


The study was published Tuesday in the Journal of the American Medical Association.


About one in 8 women will develop breast cancer in their lifetime, but only 1 in 173 will develop it by age 40. Risks increase with age and certain gene variations can raise the odds.


Routine screening with mammograms is recommended for older women but not those younger than 40.


Dr. Len Lichtenfeld, the American Cancer Society's deputy chief medical officer, said the results support anecdotal reports but that there's no reason to start screening all younger women since breast cancer is still so uncommon for them.


He said the study "is solid and interesting and certainly does raise questions as to why this is being observed." One of the most likely reasons is probably related to changes in childbearing practices, he said, adding that the trend "is clearly something to be followed."


Dr. Ann Partridge, chair of the federal Centers for Disease Control and Prevention's advisory committee on breast cancer in young women, agreed but said it's also possible that doctors look harder for advanced disease in younger women than in older patients. More research is needed to make sure the phenomenon is real, said Partridge, director of a program for young women with breast cancer at the Harvard-affiliated Dana-Farber Cancer Institute.


The study shouldn't cause alarm, she said. Still, Partridge said young women should be familiar with their breasts and see the doctor if they notice any lumps or other changes.


Software engineer Stephanie Carson discovered a large breast tumor that had already spread to her lungs; that diagnosis in 2003 was a huge shock.


"I was so clueless," she said. "I was just 29 and that was the last thing on my mind."


Carson, who lives near St. Louis, had a mastectomy, chemotherapy, radiation and other treatments and she frequently has to try new drugs to keep the cancer at bay.


Because most breast cancer is diagnosed in early stages, there's a misconception that women are treated, and then get on with their lives, Carson said. She and her husband had to abandon hopes of having children, and she's on medical leave from her job.


"It changed the complete course of my life," she said. "But it's still a good life."


____


Online:


JAMA: http://jama.ama-assn.org


CDC: http://www.cdc.gov/cancer/breast/index.htm


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Cheers! Hollywood Toasts the Oscars





From Elton John's celebrated bash to Vanity Fair's annual soiree, see how George & Stacy, Adele, Jennifer Lawrence and more marked Hollywood's biggest night








Credit: Kevin Mazur/VF13/WireImage



Updated: Monday Feb 25, 2013 | 11:30 AM EST
By: Kiran Hefa & Kate Hogan




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Koop, who transformed surgeon general post, dies


With his striking beard and starched uniform, former Surgeon General Dr. C. Everett Koop became one of the most recognizable figures of the Reagan era — and one of the most unexpectedly enduring.


His nomination in 1981 met a wall of opposition from women's groups and liberal politicians, who complained President Ronald Reagan selected Koop, a pediatric surgeon and evangelical Christian from Philadelphia, only because of his conservative views, especially his staunch opposition to abortion.


Soon, though, he was a hero to AIDS activists, who chanted "Koop, Koop" at his appearances but booed other officials. And when he left his post in 1989, he left behind a landscape where AIDS was a top research and educational priority, smoking was considered a public health hazard, and access to abortion remained largely intact.


Koop, who turned his once-obscure post into a bully pulpit for seven years during the Reagan and George H.W. Bush administrations and who surprised both ends of the political spectrum by setting aside his conservative personal views on issues such as homosexuality and abortion to keep his focus sharply medical, died Monday at his home in Hanover, N.H. He was 96.


An assistant at Koop's Dartmouth College institute, Susan Wills, confirmed his death but didn't disclose its cause.


Dr. Richard Carmona, who served as surgeon general a decade ago under President George W. Bush, said Koop was a mentor to him and preached the importance of staying true to the science even if it made politicians uncomfortable.


"He set the bar high for all who followed in his footsteps," Carmona said.


Although the surgeon general has no real authority to set government policy, Koop described himself as "the health conscience of the country" and said modestly just before leaving his post that "my only influence was through moral suasion."


A former pipe smoker, Koop carried out a crusade to end smoking in the United States; his goal had been to do so by 2000. He said cigarettes were as addictive as heroin and cocaine. And he shocked his conservative supporters when he endorsed condoms and sex education to stop the spread of AIDS.


Chris Collins, a vice president of amFAR, the Foundation for AIDS Research, said many people don't realize what an important role Koop played in the beginning of the AIDS epidemic.


"At the time, he really changed the national conversation, and he showed real courage in pursuing the duties of his job," Collins said.


Even after leaving office, Koop continued to promote public health causes, from preventing childhood accidents to better training for doctors.


"I will use the written word, the spoken word and whatever I can in the electronic media to deliver health messages to this country as long as people will listen," he promised.


In 1996, he rapped Republican presidential hopeful Bob Dole for suggesting that tobacco was not invariably addictive, saying Dole's comments "either exposed his abysmal lack of knowledge of nicotine addiction or his blind support of the tobacco industry."


Although Koop eventually won wide respect with his blend of old-fashioned values, pragmatism and empathy, his nomination met staunch opposition.


Foes noted that Koop traveled the country in 1979 and 1980 giving speeches that predicted a progression "from liberalized abortion to infanticide to passive euthanasia to active euthanasia, indeed to the very beginnings of the political climate that led to Auschwitz, Dachau and Belsen."


But Koop, a devout Presbyterian, was confirmed after he told a Senate panel he would not use the surgeon general's post to promote his religious ideology. He kept his word.


In 1986, he issued a frank report on AIDS, urging the use of condoms for "safe sex" and advocating sex education as early as third grade.


He also maneuvered around uncooperative Reagan administration officials in 1988 to send an educational AIDS pamphlet to more than 100 million U.S. households, the largest public health mailing ever.


Koop personally opposed homosexuality and believed sex should be saved for marriage. But he insisted that Americans, especially young people, must not die because they were deprived of explicit information about how HIV was transmitted.


Koop further angered conservatives by refusing to issue a report requested by the Reagan White House, saying he could not find enough scientific evidence to determine whether abortion has harmful psychological effects on women.


Koop maintained his personal opposition to abortion, however. After he left office, he told medical students it violated their Hippocratic oath. In 2009, he wrote to Senate Majority Leader Harry Reid, urging that health care legislation include a provision to ensure doctors and medical students would not be forced to perform abortions. The letter briefly set off a security scare because it was hand delivered.


Koop served as chairman of the National Safe Kids Campaign and as an adviser to President Bill Clinton's health care reform plan.


At a congressional hearing in 2007, Koop spoke about political pressure on the surgeon general post. He said Reagan was pressed to fire him every day, but Reagan would not interfere.


Koop, worried that medicine had lost old-fashioned caring and personal relationships between doctors and patients, opened his institute at Dartmouth to teach medical students basic values and ethics. He also was a part-owner of a short-lived venture, drkoop.com, to provide consumer health care information via the Internet.


Koop was born in the New York City borough of Brooklyn, the only son of a Manhattan banker and the nephew of a doctor. He said by age 5 he knew he wanted to be a surgeon and at age 13 he practiced his skills on neighborhood cats.


He attended Dartmouth, where he received the nickname Chick, short for "chicken Koop." It stuck for life.


Koop received his medical degree at Cornell Medical College, choosing pediatric surgery because so few surgeons practiced it.


In 1938, he married Elizabeth Flanagan, the daughter of a Connecticut doctor. They had four children, one of whom died in a mountain climbing accident when he was 20.


Koop was appointed surgeon-in-chief at Children's Hospital in Philadelphia and served as a professor at the University of Pennsylvania School of Medicine.


He pioneered surgery on newborns and successfully separated three sets of conjoined twins. He won national acclaim by reconstructing the chest of a baby born with the heart outside the body.


Although raised as a Baptist, he was drawn to a Presbyterian church near the hospital, where he developed an abiding faith. He began praying at the bedside of his young patients — ignoring the snickers of some of his colleagues.


Koop's wife died in 2007, and he married Cora Hogue in 2010.


He was by far the best-known surgeon general and for decades afterward was still a recognized personality.


"I was walking down the street with him one time" about five years ago, recalled Dr. George Wohlreich, director of the College of Physicians of Philadelphia, a medical society with which Koop had longstanding ties. "People were yelling out, 'There goes Dr. Koop!' You'd have thought he was a rock star."


___


Ring reported from Montpelier, Vt. Cass reported from Washington. AP Medical Writers Lauran Neergaard in Washington and Mike Stobbe in New York contributed to this report.


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Stock futures tick up after sell-off, Italy woes remain

NEW YORK (Reuters) - Stock index futures edged higher on Tuesday, indicating equities would partially rebound from the previous session's steep drop, though concerns persisted over the state of Italy's economy and government makeup.


In Italy's election, groups opposed to economic reforms posted a strong showing, resulting in a political deadlock with a comedian's protest party leading the poll and no group securing a clear majority in parliament.


Major indexes plunged more than 1 percent on Monday, with the S&P 500 having its biggest daily drop since November as investors fretted that if Italy does not undertake reforms, that could once again destabilize the euro zone. The CBOE Volatility Index <.vix> surged 34 percent in its biggest jump since August 18, 2011.


The rise in futures indicates that a recent trend of investors buying on dips will continue. Last week, concerns over whether the Federal Reserve might roll back its stimulus policy earlier than expected prompted a sharp two-day decline, though equities recovered most of ther lost ground by the end of the week. Weakness continued in Europe on Tuesday, with shares <.fteu3> down 1.2 percent.


Financial shares may be among the most volatile on Tuesday, as the group is closely tied to the pace of global economic growth. Morgan Stanley was one of the top percentage losers on the S&P on Monday, dropping more than 6 percent on concerns about the company's exposure to European debt.


Dow component Home Depot Inc will also be in focus after the home improvement retailer reported adjusted earnings and sales that beat expectations. Home Depot was up 1.3 percent to $64.75 in premarket trading.


S&P 500 futures rose 2.6 points and were above fair value, a formula that evaluates pricing by taking into account interest rates, dividends and time to expiration on the contract. Dow Jones industrial average futures added 49 points and Nasdaq 100 futures rose 3.25 points.


In the S&P, the 1,500 will be watched as a key level after the index closed below it on Monday for the first time since February 4, with selling accelerating after falling below the level that had acted as support. An inability to break back above it could portend a weaker technical backdrop. The index remains 4.3 percent higher on the year.


Gains this year have largely been driven by strong corporate earnings. With 83 percent of the S&P 500 having reported so far, 69 percent beat profit expectations, compared with a 62 percent average since 1994 and 65 percent over the past four quarters, according to Thomson Reuters data. Fourth-quarter S&P earnings are seen having risen 6 percent, above a 1.9 percent forecast at the start of the earnings season.


Companies scheduled to report results on Tuesday include Macy's Inc , Priceline.com and Tenet Healthcare . MetroPCS reported revenue that was slightly ahead of expectations earlier Tuesday.


Cyclical shares, including financials and materials, have been among the strongest performers in 2013, lifted by signs of improved economic growth. That could leave the sectors vulnerable to a pullback as events in Italy progress. Goldman Sachs on Tuesday cut its 2013 gold price forecast to $1,600 an ounce from $1,810, citing an increase in U.S. real interest rates.


While the political uncertainty from Italy may be the primary driver for markets, domestic government concerns will also be in focus. U.S. equities will face a test with the looming debate over so-called sequestration - U.S. government budget cuts that will take effect starting on Friday if lawmakers fail to reach an agreement over spending and taxes. The White House issued warnings about the harm the cuts are likely to inflict on the economy if enacted.


(Editing by Chizu Nomiyama)



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Major powers to offer Iran sanctions relief at nuclear talks: U.S. official


ALMATY, Kazakhstan (Reuters) - Major powers will offer Iran some sanctions relief during talks in Almaty, Kazakhstan, this week if Tehran agrees to curb its nuclear program, a U.S. official said on Monday.


However, the Islamic Republic could face more economic pain if the standoff remains unresolved, the official said ahead of the February 26-27 meeting, speaking on condition of anonymity. "We think ... there will be some additional sanctions relief (in the powers' updated proposal to Iran)," the official said.


(Reporting by Fredrik Dahl and Justyna Pawlak; Editing by Pravin Char)



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FDA approves new targeted breast cancer drug


WASHINGTON (AP) — The Food and Drug Administration has approved a first-of-a-kind breast cancer medication that targets tumor cells while sparing healthy ones.


The drug Kadcyla from Roche combines the established drug Herceptin with a powerful chemotherapy drug and a third chemical linking the medicines together. The chemical keeps the cocktail intact until it binds to a cancer cell, delivering a potent dose of anti-tumor poison.


Cancer researchers say the drug is an important step forward because it delivers more medication while reducing the unpleasant side effects of chemotherapy.


"This antibody goes seeking out the tumor cells, gets internalized and then explodes them from within. So it's very kind and gentle on the patients — there's no hair loss, no nausea, no vomiting," said Dr. Melody Cobleigh of Rush University Medical Center. "It's a revolutionary way of treating cancer."


Cobleigh helped conduct the key studies of the drug at the Chicago facility.


The FDA approved the new treatment for about 20 percent of breast cancer patients with a form of the disease that is typically more aggressive and less responsive to hormone therapy. These patients have tumors that overproduce a protein known as HER-2. Breast cancer is the second most deadly form of cancer in U.S. women, and is expected to kill more than 39,000 Americans this year, according to the National Cancer Institute.


The approval will help Roche's Genentech unit build on the blockbuster success of Herceptin, which has long dominated the breast cancer marketplace. The drug had sales of roughly $6 billion last year.


Genentech said Friday that Kadcyla will cost $9,800 per month, compared to $4,500 per month for regular Herceptin. The company estimates a full course of Kadcyla, about nine months of medicine, will cost $94,000.


FDA scientists said they approved the drug based on company studies showing Kadcyla delayed the progression of breast cancer by several months. Researchers reported last year that patients treated with the drug lived 9.6 months before death or the spread of their disease, compared with a little more than six months for patients treated with two other standard drugs, Tykerb and Xeloda.


Overall, patients taking Kadcyla lived about 2.6 years, compared with 2 years for patients taking the other drugs.


FDA specifically approved the drug for patients with advanced breast cancer who have already been treated with Herceptin and taxane, a widely used chemotherapy drug. Doctors are not required to follow FDA prescribing guidelines, and cancer researchers say the drug could have great potential in patients with earlier forms of breast cancer


Kadcyla will carry a boxed warning, the most severe type, alerting doctors and patients that the drug can cause liver toxicity, heart problems and potentially death. The drug can also cause severe birth defects and should not be used by pregnant women.


Kadcyla was developed by South San Francisco-based Genentech using drug-binding technology licensed from Waltham, Mass.-based ImmunoGen. The company developed the chemical that keeps the drug cocktail together and is scheduled to receive a $10.5 million payment from Genentech on the FDA decision. The company will also receive additional royalties on the drug's sales.


Shares of ImmunoGen Inc. rose 2 cents to $14.32 in afternoon trading. The stock has ttraded in a 52-wek range of $10.85 to $18.10.


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Stock futures advance, Barnes & Noble up early

NEW YORK (Reuters) - Stock index futures rose on Monday, suggesting the recent rally for equities remains intact in spite of concerns that the U.S. Federal Reserve could curtail its stimulus sooner than many expected.


* Stocks have been strong performers so far this year, with the S&P 500 jumping 6.2 percent in 2013. Pullbacks have generally been slight, with investors using any dip as a buying opportunity. While the S&P fell last week, the decline was a slight 0.3 percent and it was the first weekly drop after a seven-week streak of gains.


* The gains have come on strong corporate earnings, as well as a backdrop of stimulus from the Federal Reserve. Last week's decline came when some Fed officials seemed to suggest the stimulus may be curtailed faster than many expected, though subsequent comments seemed to allay those concerns.


* Another test for equities will come with the looming debate over massive U.S. government budget cuts that will take effect if lawmakers fail to reach an agreement over spending and taxes. On Sunday, the White House issued more dire warnings about the harm the cuts are expected to do to the economy if enacted.


* More government-related uncertainty came from Italy, where a close election left questions about how the country would handle its three-year debt crisis. Last year, inconclusive Greek elections sparked a protracted selloff and a period of uncertainty in U.S. equity markets as well.


* Still, European shares <.fteu3> were higher on Monday, rising 0.6 percent after a smooth Italian debt auction.


* S&P 500 futures rose 6.4 points and were above fair value, a formula that evaluates pricing by taking into account interest rates, dividends and time to expiration on the contract. Dow Jones industrial average futures added 39 points and Nasdaq 100 futures rose 17.25 points.


* In company news, the Wall Street Journal reported that Barnes & Noble Inc Chairman Leonard Riggio is considering a bid for the company's bookstore business. The stock jumped 18 percent to $16 in premarket trading.


* Lowe's Cos Inc reported earnings that beat expectations, helped by rebuilding efforts after Hurricane Sandy in the United States.


* Other companies scheduled to report quarterly results include Autodesk Inc and FirstEnergy .


* Fourth-quarter earnings for S&P 500 companies are estimated to have risen 6 percent, according to Thomson Reuters data, above a 1.9 percent forecast at the start of the earnings season.


* U.S. stocks closed higher on Friday, boosted by strong results from Hewlett-Packard Co , as well as allayed concerns over Fed policy.


(Editing by Chizu Nomiyama)



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Frustrated Italians vote in crucial election for euro zone


ROME (Reuters) - Italians voted on Sunday in one of the most closely watched and unpredictable elections in years, with pent-up fury over a discredited elite adding to concern it may not produce a government strong enough to lead Italy out of an economic slump.


The election, which concludes on Monday afternoon, is being followed closely by investors; their memories are still fresh of the potentially catastrophic debt crisis that saw Mario Monti, an economics professor and former bureaucrat, summoned to serve as prime minister in place of Silvio Berlusconi 15 months ago.


A weak Italian government could, many fear, prompt a new dip in confidence in the European Union's single currency.


Opinion polls give the center-left a narrow lead but the result has been thrown completely open by the prospect of a huge protest vote against the painful austerity measures imposed by Monti's government and deep anger over a never-ending series of corruption scandals. Berlusconi's centre-right has also revived.


"I'm not confident that the government that emerges from the election will be able to solve any of our problems," said Attilio Bianchetti, a 55-year-old builder in Milan, who voted for the anti-establishment 5-Star Movement of comic and blogger Beppe Grillo.


The 64-year-old Grillo, heavily backed by a frustrated generation of young Italians hit by record unemployment, has been one of the biggest features of the last stage of the campaign, packing rallies in town squares up and down Italy.


"He's the only real new element in a political landscape where we've been seeing the same faces for too long," said Vincenzo Cannizzaro, 48, in the Sicialian capital Palermo.


Italians started voting at 8 a.m. (0700 GMT). Polling booths will remain open until 10 p.m. on Sunday and open again between 7 a.m. and 3 p.m. on Monday. Exit polls will come out soon after voting ends and official results are expected by early Tuesday.


Snow in northern regions is expected to last into Monday and could discourage some of the 47 million people eligible to vote in Italy to head out to polling stations, though the Interior Ministry has said it is fully prepared for bad weather.


Monti and his wife cast their votes at a polling booth in a Milan school on Sunday morning and centre-left leader Pier Luigi Bersani, the leader opinion polls suggest will have to form a new government, voted in his home town of Piacenza.


A small group of women's rights demonstrators greeted former prime minister Berlusconi when he voted in Milan. They bared their breasts in protest at the conservative leader, who is on trial at present for having sex with an underage prostitute.


Whichever government emerges from the election will have to tackle reforms needed to address problems that have given Italy one of the most sluggish economies in the developed world for the past two decades.


But the widespread despair over the state of the country, where a series of corruption scandals has highlighted the stark divide between a privileged political elite and millions of ordinary Italians, has left deep scars.


"It's our fault, Italian citizens. It's our closed mentality. We're just not Europeans," said Luciana Li Mandri, a 37-year-old public servant in Palermo.


"We're all about getting favors when we study, getting a protected job when we work. That's the way we are and we can only be represented by people like that as well," she said.


FRUSTRATION


Final polls published two weeks ago showed center-left leader Bersani with a 5-point lead, but analysts disagree about whether he will be able to form a stable majority that can make the economic reforms they believe Italy needs.


While the center left is still expected to gain control of the lower house, thanks to rules that guarantee a strong majority to whichever party wins the most votes nationally, a much closer battle will be fought for the Senate, which any government also needs to control to be able to pass laws.


The euro zone's third-largest economy is stuck in deep recession, struggling under a public debt burden second only to Greece in the 17-member currency bloc and with a public weary of more than a year of austerity policies.


Bersani is now thought to be just a few points ahead of media magnate Berlusconi, the four-times prime minister who has promised tax refunds and staged a media blitz in an attempt to win back voters.


Think-tank consultant Mario, 60, who was on his way to vote in Bologna, said Bersani's Democratic Party was the only serious grouping that could help solve the country's economic woes.


"They're not perfect," he said. "But they've got the organization and the union backing that will help them push through the structural reforms."


A strong fightback by Berlusconi, who has promised to repay a widely hated housing tax, the IMU, imposed by Monti last year, saw his support climb during a campaign that relentlessly attacked the "German-centric" austerity policies of the former European Union commissioner.


"I won't vote for Monti, and I don't think a lot of people will. He made a huge blunder with IMU," said 35-year-old hairdresser Marco Morando, preparing to vote in Milan.


But the populist frustration Berlusconi's campaign tapped into has also benefitted Grillo and many pollsters said his 5-Star Movement, made up of political novices, was challenging the center-right for the position as second political force.


"I'm very worried. There seems to be no way out from a political point of view, or from being able to govern," said Calogero Giallanza, a 45-year-old musician in Rome, who voted for Bersani's Democrats.


"There's bound to be a mess in the Senate because, as far as I can see, the 5-Star Movement is unstoppable."


(Additional reporting by Cristiano Corvino, Lisa Jucca, Jennifer Clark, Matthias Baehr and Sara Rossi in Milan, Stephen Jewkes in Bologna, Wladimir Pantaleone in Palermo, Stefano Bernabei and Massimiliano Di Giorgio in Rome; Editing by Robin Pomeroy and Alastair Macdonald)



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