European shares quickly cut their earlier gains to end mixed after a projection by Italian TV showed the center-right party, led by former leader Silvio Berlusconi, leading in elections for the Senate vote. Meanwhile, Italian state TV station RAI said none of the four main groups running in the Italian parliamentary election is likely to win a majority in the Senate. A coalition or party must win at least 158 of the 315 Senate seats to gain a majority in the upper house, which a government would need to pass legislation.
Investors have been closely watching the outcome of the Italian election as the government's decision over the next few months could influence whether Europe can stem its financial crisis. Italy is the euro zone's third largest economy.
The euro continued to weaken against the U.S. greenback, falling below $1.31 for the firs time since January 10.
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Among earnings, home improvement retailer Lowe's posted earnings and revenue that topped Wall Street expectations, as sales benefited from rebuilding after super storm Sandy. However, the company's outlook disappointed analysts.
Hertz posted a quarterly loss, hurt by to costs related to its acquisition of rival Dollar Thrifty, but shares still rallied after the car rental company's adjusted earnings still topped expectations. In addition, the firm said it expects to see strong results for 2013 on higher pricing.
Caesar's Entertainment and Autodesk are among notable companies schedule to report quarterly results after the closing bell.
Barnes & Noble soared after the bookstore chain's Chairman Leonard Riggio said he plans to purchase the retail assets of the company, according to a filing. Barnes & Noble said it has set up a committee of three independent directors to evaluate Riggio's proposal. The company is scheduled to report earnings results on Thursday.
Microsoft was in focus after Stifel Nicolaus suggested the computer giant should split into two firms, with one focused on software and the other on devices. The tech giant's stock was in the red, along with the broader market.
Also among techs, Zynga gained after the social gaming company said it is cutting about 1 percent of its staff and consolidating a handful of offices across the nation in a cost-cutting move.