By Steve Goldstein, MarketWatch
Italian stocks on Tuesday gained ground, aided by hopes that a new government can be formed without an election.
The Italy FTSE MIB rose 1.14% to 20913.64.
Reports indicated that the 5-Star Movement was on the cusp of reaching a deal with the Democratic Party to form a new coalition. If an election is held instead, an automatic VAT increase is triggered.
Elsewhere in Europe, stocks turned higher. The German DAX rose 0.38% to 11701.99 and the French CAC 40 gained 0.18% to 5360.40.
The U.K. FTSE 100 declined 0.21% to 7080.23 after a three-day break.
After a 269-point advance for the Dow industrials on Monday, U.S. stock futures were a bit higher.
Deutsche Boerse (DB1.XE) shares fell 1.9% as the exchange operator revealed a tax probe.
Insulation maker Rockwool International (ROCK-B.KO) dropped 4%, extending losses after cutting guidance.
Airport operator Flughafen Zurich (FHZN.EB) rose after reporting a first-half profit rise of 10% and saying its annual profit will grow 5%. It also reduced its passenger growth guidance to 2% growth from 3% growth.