David Bowie Makes Triumphant Comeback with New Album: PEOPLE's Critic

By Chuck Arnold

03/01/2013 at 08:40 PM EST

Ten years after his last album, David Bowie is back – and so is his swagger.

Forget the moody musings of "Where Are We Now?" – the reflective comeback single that he dropped, seemingly out of nowhere, on his birthday last month (Jan. 8). The Next Day – which, though not released until March 12, began streaming in its entirety on iTunes on Friday – represents much more of an emphatic, energetic return from the 66-year-old Rock and Roll Hall of Famer.

"We'll never be rid of these stars/ But I hope they live forever," sings Bowie, sounding like the immortal rock god he is over the glittering guitar-pop bounce of "The Stars (Are Out Tonight)."

It's one of many driving, guitar-charged tracks on The Next Day: You can just imagine Ziggy Stardust getting his groove on to the bouncy beat of "Dancing Out in Space," while "(You Will) Set the World on Fire" is a rocking, fist-pumping anthem for today's young Americans.

Elsewhere, "Dirty Boys" is a sleazy grinder that, with its saxed-up funkiness, harks back to his soulful periods like 1975's Young Americans. In another nod to Bowie's past, The Next Day was produced by Tony Visconti, who also worked on the star's Berlin Trilogy albums from 1977 to 1979.

On one of the standouts, the melodic, midtempo "I'd Rather Be High," the album takes a political turn with Bowie's anti-war message: "I'd rather be dead or out of my head/ Then training these guns on those men in the sand."

It's moments like these that make The Next Day a triumphant comeback from a much-missed icon.

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WHO: Slight cancer risk after Japan nuke accident

LONDON (AP) — Two years after Japan's nuclear plant disaster, an international team of experts said Thursday that residents of areas hit by the highest doses of radiation face an increased cancer risk so small it probably won't be detectable.

In fact, experts calculated that increase at about 1 extra percentage point added to a Japanese infant's lifetime cancer risk.

"The additional risk is quite small and will probably be hidden by the noise of other (cancer) risks like people's lifestyle choices and statistical fluctuations," said Richard Wakeford of the University of Manchester, one of the authors of the report. "It's more important not to start smoking than having been in Fukushima."

The report was issued by the World Health Organization, which asked scientists to study the health effects of the disaster in Fukushima, a rural farming region.

On March 11, 2011, an earthquake and tsunami knocked out the Fukushima plant's power and cooling systems, causing meltdowns in three reactors and spewing radiation into the surrounding air, soil and water. The most exposed populations were directly under the plumes of radiation in the most affected communities in Fukushima, which is about 150 miles (240 kilometers) north of Tokyo.

In the report, the highest increases in risk are for people exposed as babies to radiation in the most heavily affected areas. Normally in Japan, the lifetime risk of developing cancer of an organ is about 41 percent for men and 29 percent for women. The new report said that for infants in the most heavily exposed areas, the radiation from Fukushima would add about 1 percentage point to those numbers.

Experts had been particularly worried about a spike in thyroid cancer, since radioactive iodine released in nuclear accidents is absorbed by the thyroid, especially in children. After the Chernobyl disaster, about 6,000 children exposed to radiation later developed thyroid cancer because many drank contaminated milk after the accident.

In Japan, dairy radiation levels were closely monitored, but children are not big milk drinkers there.

The WHO report estimated that women exposed as infants to the most radiation after the Fukushima accident would have a 70 percent higher chance of getting thyroid cancer in their lifetimes. But thyroid cancer is extremely rare and one of the most treatable cancers when caught early. A woman's normal lifetime risk of developing it is about 0.75 percent. That number would rise by 0.5 under the calculated increase for women who got the highest radiation doses as infants.

Wakeford said the increase may be so small it will probably not be observable.

For people beyond the most directly affected areas of Fukushima, Wakeford said the projected cancer risk from the radiation dropped dramatically. "The risks to everyone else were just infinitesimal."

David Brenner of Columbia University in New York, an expert on radiation-induced cancers, said that although the risk to individuals is tiny outside the most contaminated areas, some cancers might still result, at least in theory. But they'd be too rare to be detectable in overall cancer rates, he said.

Brenner said the numerical risk estimates in the WHO report were not surprising. He also said they should be considered imprecise because of the difficulty in determining risk from low doses of radiation. He was not connected with the WHO report.

Some experts said it was surprising that any increase in cancer was even predicted.

"On the basis of the radiation doses people have received, there is no reason to think there would be an increase in cancer in the next 50 years," said Wade Allison, an emeritus professor of physics at Oxford University, who also had no role in developing the new report. "The very small increase in cancers means that it's even less than the risk of crossing the road," he said.

WHO acknowledged in its report that it relied on some assumptions that may have resulted in an overestimate of the radiation dose in the general population.

Gerry Thomas, a professor of molecular pathology at Imperial College London, accused the United Nations health agency of hyping the cancer risk.

"It's understandable that WHO wants to err on the side of caution, but telling the Japanese about a barely significant personal risk may not be helpful," she said.

Thomas said the WHO report used inflated estimates of radiation doses and didn't properly take into account Japan's quick evacuation of people from Fukushima.

"This will fuel fears in Japan that could be more dangerous than the physical effects of radiation," she said, noting that people living under stress have higher rates of heart problems, suicide and mental illness.

In Japan, Norio Kanno, the chief of Iitate village, in one of the regions hardest hit by the disaster, harshly criticized the WHO report on Japanese public television channel NHK, describing it as "totally hypothetical."

Many people who remain in Fukushima still fear long-term health risks from the radiation, and some refuse to let their children play outside or eat locally grown food.

Some restrictions have been lifted on a 12-mile (20-kilometer) zone around the nuclear plant. But large sections of land in the area remain off-limits. Many residents aren't expected to be able to return to their homes for years.

Kanno accused the report's authors of exaggerating the cancer risk and stoking fear among residents.

"I'm enraged," he said.

___

Mari Yamaguchi in Tokyo and AP Science Writer Malcolm Ritter in New York contributed to this report.

__

Online:

WHO report: http://bit.ly/YDCXcb

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Paris Jackson Rocks a New Punk Look

By Andrea Billups

03/01/2013 at 08:30 AM EST

Punk rock Paris!

Michael Jackson's daughter Paris, now 14, debuted a more edgy and downtown look this week when she Tweeted photos of herself wearing a knotted Pink Floyd T-shirt with a short, spiked jet black coif and exposed back tattoo.

Titling her Wednesday Tweet "late night creativity," Paris sported a new look that included black liner rimming her striking light-blue eyes, and dagger-style earrings.

Her transformation from long-haired and girlie draws comparisons to the latest cropped, rock-inspired look of Miley Cyrus.

Paris, an aspiring actress, Tweeted in August that she got her back tattoo to honor her late father. She had previously posted photos of herself on Valentine's Day in a short black wig, perhaps a tryout for her future makeover.

Paris is Michael Jackson's only daughter with former wife Debbie Rowe. She has said in the past that she loves her famous family but hopes to be taken seriously in her own right.

To that end, she shot her first movie role last year, for Lundon's Bridge and the Three Keys, a mixed live-action and animation film. She plays a girl who survives being brainwashed by a jellyfish queen in the ocean.

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WHO: Slight cancer risk after Japan nuke accident

LONDON (AP) — Two years after Japan's nuclear plant disaster, an international team of experts said Thursday that residents of areas hit by the highest doses of radiation face an increased cancer risk so small it probably won't be detectable.

In fact, experts calculated that increase at about 1 extra percentage point added to a Japanese infant's lifetime cancer risk.

"The additional risk is quite small and will probably be hidden by the noise of other (cancer) risks like people's lifestyle choices and statistical fluctuations," said Richard Wakeford of the University of Manchester, one of the authors of the report. "It's more important not to start smoking than having been in Fukushima."

The report was issued by the World Health Organization, which asked scientists to study the health effects of the disaster in Fukushima, a rural farming region.

On March 11, 2011, an earthquake and tsunami knocked out the Fukushima plant's power and cooling systems, causing meltdowns in three reactors and spewing radiation into the surrounding air, soil and water. The most exposed populations were directly under the plumes of radiation in the most affected communities in Fukushima, which is about 150 miles (240 kilometers) north of Tokyo.

In the report, the highest increases in risk are for people exposed as babies to radiation in the most heavily affected areas. Normally in Japan, the lifetime risk of developing cancer of an organ is about 41 percent for men and 29 percent for women. The new report said that for infants in the most heavily exposed areas, the radiation from Fukushima would add about 1 percentage point to those numbers.

Experts had been particularly worried about a spike in thyroid cancer, since radioactive iodine released in nuclear accidents is absorbed by the thyroid, especially in children. After the Chernobyl disaster, about 6,000 children exposed to radiation later developed thyroid cancer because many drank contaminated milk after the accident.

In Japan, dairy radiation levels were closely monitored, but children are not big milk drinkers there.

The WHO report estimated that women exposed as infants to the most radiation after the Fukushima accident would have a 70 percent higher chance of getting thyroid cancer in their lifetimes. But thyroid cancer is extremely rare and one of the most treatable cancers when caught early. A woman's normal lifetime risk of developing it is about 0.75 percent. That number would rise by 0.5 under the calculated increase for women who got the highest radiation doses as infants.

Wakeford said the increase may be so small it will probably not be observable.

For people beyond the most directly affected areas of Fukushima, Wakeford said the projected cancer risk from the radiation dropped dramatically. "The risks to everyone else were just infinitesimal."

David Brenner of Columbia University in New York, an expert on radiation-induced cancers, said that although the risk to individuals is tiny outside the most contaminated areas, some cancers might still result, at least in theory. But they'd be too rare to be detectable in overall cancer rates, he said.

Brenner said the numerical risk estimates in the WHO report were not surprising. He also said they should be considered imprecise because of the difficulty in determining risk from low doses of radiation. He was not connected with the WHO report.

Some experts said it was surprising that any increase in cancer was even predicted.

"On the basis of the radiation doses people have received, there is no reason to think there would be an increase in cancer in the next 50 years," said Wade Allison, an emeritus professor of physics at Oxford University, who also had no role in developing the new report. "The very small increase in cancers means that it's even less than the risk of crossing the road," he said.

WHO acknowledged in its report that it relied on some assumptions that may have resulted in an overestimate of the radiation dose in the general population.

Gerry Thomas, a professor of molecular pathology at Imperial College London, accused the United Nations health agency of hyping the cancer risk.

"It's understandable that WHO wants to err on the side of caution, but telling the Japanese about a barely significant personal risk may not be helpful," she said.

Thomas said the WHO report used inflated estimates of radiation doses and didn't properly take into account Japan's quick evacuation of people from Fukushima.

"This will fuel fears in Japan that could be more dangerous than the physical effects of radiation," she said, noting that people living under stress have higher rates of heart problems, suicide and mental illness.

In Japan, Norio Kanno, the chief of Iitate village, in one of the regions hardest hit by the disaster, harshly criticized the WHO report on Japanese public television channel NHK, describing it as "totally hypothetical."

Many people who remain in Fukushima still fear long-term health risks from the radiation, and some refuse to let their children play outside or eat locally grown food.

Some restrictions have been lifted on a 12-mile (20-kilometer) zone around the nuclear plant. But large sections of land in the area remain off-limits. Many residents aren't expected to be able to return to their homes for years.

Kanno accused the report's authors of exaggerating the cancer risk and stoking fear among residents.

"I'm enraged," he said.

___

Mari Yamaguchi in Tokyo and AP Science Writer Malcolm Ritter in New York contributed to this report.

__

Online:

WHO report: http://bit.ly/YDCXcb

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Debbie Reynolds: Carrie Fisher Will Be 'Just Fine' After Hospitalization

By Elaine Aradillas

02/28/2013 at 08:40 AM EST

Carrie Fisher (left) and Debbie Reynolds

Ethan Miller/Getty

Carrie Fisher was briefly hospitalized last week for her bipolar disorder after a bizarre performance aboard a cruise ship, but her mother Debbie Reynolds says she'll be fine.

"She's had manic depression bipolar since she was 13. It's an illness, and she's doing much better," Reynolds told PEOPLE exclusively Wednesday night. "I'm very proud of her, and she's doing exceptionally well. She'll be just fine, just great, and continue her writing as she always does."

Fisher, 56, who has spoken openly about her mental illness, performed on the Holland American cruise liner Eurodam in the Caribbean. The actress and author gave a rambling performance, leaving many in the audience wondering what was wrong.

"She clearly had trouble remembering things," says Chris Smith, a guest on the cruise. "She tried to tell some stories about her parents and Hollywood, but was having a hard time."

After a video of the performance went viral, her publicist released the following statement: "There was a medical incident related to Carrie Fisher's bipolar disorder. She went to the hospital briefly to adjust her medication and is feeling much better now."

Reynolds, 80, who spoke Wednesday to a sold-out audience attending the Rancho Mirage Lecture Series at Eisenhower Medical Center in Rancho Mirage, Calif., talked about the effects of mental illness.

"[It's] really dreadful, and you are so alone because you're criticized, and people think you're doing it on purpose, and that you're misbehaving or having a spell because you want attention," she says. "It's not true. It's extremely difficult for everyone to deal with."

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Medicare paid $5.1B for poor nursing home care

SAN FRANCISCO (AP) — Medicare paid billions in taxpayer dollars to nursing homes nationwide that were not meeting basic requirements to look after their residents, government investigators have found.

The report, released Thursday by the Department of Health and Human Services' inspector general, said Medicare paid about $5.1 billion for patients to stay in skilled nursing facilities that failed to meet federal quality of care rules in 2009, in some cases resulting in dangerous and neglectful conditions.

One out of every three times patients wound up in nursing homes that year, they landed in facilities that failed to follow basic care requirements laid out by the federal agency that administers Medicare, investigators estimated.

By law, nursing homes need to write up care plans specially tailored for each resident, so doctors, nurses, therapists and all other caregivers are on the same page about how to help residents reach the highest possible levels of physical, mental and psychological well-being.

Not only are residents often going without the crucial help they need, but the government could be spending taxpayer money on facilities that could endanger people's health, the report concluded. The findings come as concerns about health care quality and cost are garnering heightened attention as the Obama administration implements the nation's sweeping health care overhaul.

"These findings raise concerns about what Medicare is paying for," the report said.

Investigators estimate that in one out of five stays, patients' health problems weren't addressed in the care plans, falling far short of government directives. For example, one home made no plans to monitor a patient's use of two anti-psychotic drugs and one depression medication, even though the drugs could have serious side effects.

In other cases, residents got therapy they didn't need, which the report said was in the nursing homes' financial interest because they would be reimbursed at a higher rate by Medicare.

In one example, a patient kept getting physical and occupational therapy even though the care plan said all the health goals had been met, the report said.

The Office of Inspector General's report was based on medical records from 190 patient visits to nursing homes in 42 states that lasted at least three weeks, which investigators said gave them a statistically valid sample of Medicare beneficiaries' experiences in skilled nursing facilities.

That sample represents about 1.1 million patient visits to nursing homes nationwide in 2009, the most recent year for which data was available, according to the review.

Overall, the review raises questions about whether the system is allowing homes to get paid for poor quality services that may be harming residents, investigators said, and recommended that the Centers for Medicare & Medicaid Services tie payments to homes' abilities to meet basic care requirements. The report also recommended that the agency strengthen its regulations and ramp up its oversight. The review did not name individual homes, nor did it estimate the number of patients who had been mistreated, but instead looked at the overall number of stays in which problems arose.

In response, the agency agreed that it should consider tying Medicare reimbursements to homes' provision of good care. CMS also said in written comments that it is reviewing its own regulations to improve enforcement at the homes.

"Medicare has made significant changes to the way we pay providers thanks to the health care law, to reward better quality care," Medicare spokesman Brian Cook said in a statement to AP. "We are taking steps to make sure these facilities have the resources to improve the quality of their care, and make sure Medicare is paying for the quality of care that beneficiaries are entitled to."

CMS hires state-level agencies to survey the homes and make sure they are complying with federal law, and can require correction plans, deny payment or end a contract with a home if major deficiencies come to light. The agency also said it would follow up on potential enforcement at the homes featured in the report.

Greg Crist, a Washington-based spokeswoman for the American Health Care Association, which represents the largest share of skilled nursing facilities nationwide, said overall nursing home operators are well regulated and follow federal guidelines but added that he could not fully comment on the report's conclusions without having had the chance to read it.

"Our members begin every treatment with the individual's personal health needs at the forefront. This is a hands-on process, involving doctors and even family members in an effort to enhance the health outcome of the patient," Crist said.

Virginia Fichera, who has relatives in two nursing homes in New York, said she would welcome a greater push for accountability at skilled nursing facilities.

"Once you're in a nursing home, if things don't go right, you're really a prisoner," said Fichera, a retired professor in Sterling, NY. "As a concerned relative, you just want to know the care is good, and if there are problems, why they are happening and when they'll be fixed."

Once residents are ready to go back home or transfer to another facility, federal law also requires that the homes write special plans to make sure patients are safely discharged.

Investigators found the homes didn't always do what was needed to ensure a smooth transition.

In nearly one-third of cases, facilities also did not provide enough information when the patient moved to another setting, the report found.

___

On the Web:

The OIG report: http://1.usa.gov/VaztQm

The Medicare nursing home database: http://www.medicare.gov/NursingHomeCompare/search.aspx?bhcp=1&AspxAutoDetectCookieSupport=1

___

Follow Garance Burke on Twitter at —http://twitter.com/garanceburke.

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S&P 500 index futures briefly turn negative

MADRID, Feb 27 (Reuters) - Lionel Messi has rarely been accused of failing to deliver in big games, having scored in two European Cup finals, but after subdued performances against AC Milan and Real Madrid, questions are being asked. The four-times World Player of the Year and leading scorer in one of the greatest club teams of all time, was a shadow of his usual self at the San Siro in a Champions League last-16 first leg last week, when Barcelona slumped to a 2-0 defeat. ...

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Prince Harry Dances, Cooks with Kids In South Africa

By Simon Perry

02/27/2013 at 08:30 AM EST

Prince Harry, at Lesotho's St. Bernadette's Centre for the Blind

Chris Jackson/Getty

From the slopes of the Alps to the southern African mountain kingdom of Lesotho, Prince Harry is now giving back.

Just returned from his skiing holiday with girlfriend Cressida Bonas, Harry is spending a couple of days in Africa, to work with the Sentebale charity he set up with Lesotho's Prince Seeiso.

Early Wednesday, the Prince, 28, visited the Kananelo Center for the Deaf just outside the capital Maseru, where he was welcomed with a huge "Hi Harry" sign on the chalkboard.

As he attempted to learn some sign language from the children, he quipped to his friend Seeiso, "I'm never going to get this right."

The two princes, who set up the charity (Sentebale means "Forget Me Not") in honor of their late mothers, were then taken to the school's kitchen, where Harry slipped on a purple apron decorated with teddy bears before they tried their hand at making Sotho sweet bread cooked in boiling oil – also known as "fat cakes."

They also got down on their knees to join the kids in a dance.

Following that visit, the pair headed to St. Bernadette's School for the Blind in the capital, Maseru. There, Harry was welcomed with a song sung in the Sesotho language.

The charity supports tens of thousands of children who are either suffering from HIV/Aids, have been orphaned, or have disabilities.

Later, he is to be guest of honor at a fundraising dinner in Johannesburg.

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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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Italy faces post-vote stalemate, spooking investors

ROME (Reuters) - The Italian stock market fell and state borrowing costs rose on Tuesday as investors took fright at political deadlock after a stunning election that saw a comedian's protest party lead the poll and no group secure a clear majority in parliament.

"The winner is: Ingovernability" ran the headline in Rome newspaper Il Messaggero, reflecting the stalemate the country would have to confront in the next few weeks as sworn enemies would be forced to work together to form a government.

In a sign of where that might lead, former prime minister Silvio Berlusconi indicated his center-right might be open to a grand coalition with the center-left bloc of Pier Luigi Bersani, which will have a majority in the lower house thanks to a premium of seats given to the largest bloc in the chamber.

Results in the upper house, the Senate, where seats are awarded on a region-by-region basis, indicated the center-left would end up with about 119 seats, compared with 117 for the center-right. But 158 are needed for a majority to govern.

Any coalition administration that may be formed must have a working majority in both houses in order to pass legislation.

Comedian Beppe Grillo's anti-establishment 5-Star Movement won the most votes of any single party, taking 25 percent. He shows no immediate inclination to cooperate with other groups.

Despite talk of a new election, the main established parties seem likely to try to avoid that, fearing even more humiliation.

World financial markets reacted nervously to the prospect of a stalemate in the euro zone's third largest economy with memories still fresh of the crisis that took the 17-member currency bloc to the brink of collapse in 2011.

In a clear sign of worry at the top over what effect the elections could have on the economy, Prime Minister Mario Monti, whose austerity policies were repudiated by voters, called a meeting with the governor of the central bank, the economy minister and the European affairs minister for later on Tuesday.

Other governments in the euro zone sounded uneasy. Allies of German Chancellor Angela Merkel made no secret of disappointment at Monti's debacle and urged Rome to continue with economic reforms Berlin sees as vital to stabilizing the common currency.

France's Socialist finance minister also expressed "worry" at the prospect of legislative deadlock in Italy but said that Italians had rejected austerity and hoped Bersani's center-left could form a stable government to help foster growth in Europe.

INSTABILITY

Fabio Fois, an economist at Barclays bank, said: "Political instability is likely to prevail in the near term and slow the implementation of much needed structural reforms unless a grand coalition among center-left, center-right and center is formed."

Berlusconi, a media magnate whose campaigning all but wiped out Bersani's once commanding opinion poll lead, hinted in a telephone call to a morning television show that he would be open to a deal with the center-left - but not with Monti, the technocrat summoned to replace him in a crisis 15 months ago.

"Italy must be governed," Berlusconi said, adding that he "must reflect" on a possible deal with the center-left. "Everyone must be prepared to make sacrifices," he said of the groups which now have a share of the legislature.

The Milan bourse was down more than four percent and the premium Italy pays over Germany to borrow on 10-year widened to a yield spread of 338.7 basis points, the highest since December 10.

At an auction of six-month Treasury bills, the government's borrowing costs shot up by more than two thirds. Investors demanded a yield of 1.237 percent, the highest since October and compared to just 0.730 percent in a similar sale a month ago.

Berlusconi, who was forced from office in November 2011 as borrowing costs approached levels investors feared would become unsustainable, said he was "not worried" about market reaction to the election and played down the significance of the spread.

The poor showing by Monti's centrist bloc reflected a weariness with austerity that was exploited by both Berlusconi and Grillo; only with the help of center-left allies did Bersani beat 5-Star, by just 125,000 votes, to control the lower house.

The worries immediately went beyond Italy's borders.

"What is crucial now is that a stable functioning government can be built as swiftly as possible," said German Foreign Minister Guido Westerwelle. "This is not only in the interests of Italy but in the interests of all Europe."

The euro skidded to an almost seven-week low against the dollar in Asia on fears about the euro zone's debt crisis. It fell as far as $1.3042, its lowest since January 10.

"NON-PARTY" SURGES TO THE TOP

Commentators said all Grillo's adversaries underestimated the appeal of a grassroots movement that called itself a "non-party", particularly its allure among young Italians who find themselves without jobs and the prospect of a decent future.

The 5-star Movement's score of 25.5 percent in the lower house was just ahead of the 25.4 percent for Bersani's Democratic Party, which ran in a coalition with the leftist SEL party, and it won almost 8.7 million votes overall - more than any other single party.

"The 'non-party' has become the largest party in the country," said Massimo Giannini, commentator for Rome newspaper La Repubblica, of Grillo, who mixes fierce attacks on corruption with policies ranging from clean energy to free Internet.

Grillo's surge in the final weeks of the campaign threw the race open, with hundreds of thousands turning up at his rallies to hear him lay into targets ranging from corrupt politicians and bankers to German Chancellor Angela Merkel.

In just three years, his 5-Star Movement, heavily backed by a frustrated generation of young Italians increasingly shut out from permanent full-time jobs, has grown from a marginal group to one of the most talked about political forces in Europe.

RECESSION

"It's a classic result. Typically Italian," said Roberta Federica, a 36-year-old office worker in Rome. "It means the country is not united. It is an expression of a country that does not work. I knew this would happen."

Italy's borrowing costs have come down in recent months, helped by the promise of European Central Bank support but the election result confirmed fears of many European countries that it would not produce a government strong enough to implement effective reforms.

A long recession and growing disillusionment with mainstream parties fed a bitter public mood that saw more than half of Italian voters back parties that rejected the austerity policies pursued by Monti with the backing of Italy's European partners.

Monti suffered a major setback. His centrist grouping won only 10.6 percent and two of his key centrist allies, Pier Ferdinando Casini and lower house speaker Gianfranco Fini, both of parliamentarians for decades, were booted out.

"It's not that surprising if you consider how much people were let down by politics in its traditional forms," Monti said.

Berlusconi's campaign, mixing sweeping tax cut pledges with relentless attacks on Monti and Merkel, echoed many of the themes pushed by Grillo and underlined the increasingly angry mood of the Italian electorate.

Even if the next government turns away from the tax hikes and spending cuts brought in by Monti, it will struggle to revive an economy that has scarcely grown in two decades.

Monti was widely credited with tightening Italy's public finances and restoring its international credibility after the scandal-plagued Berlusconi, who is currently on trial for having sex with an under-age prostitute.

But Monti struggled to pass the kind of structural reforms needed to improve competitiveness and lay the foundations for a return to economic growth, and a weak center-left government may not find it any easier.

(Additional reporting by Barry Moody, Gavin Jones, Catherine Hornby, Lisa Jucca, Steven Jewkes, Steve Scherer and Naomi O'Leary; Writing by Philip Pullella; Editing by Alastair Macdonald)

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