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Spanish bond yields surge past 7% on bad-loan data. Yields on Spain's 10-year bonds rose 24 basis points to an unsustainable 7.11% following data showing that non-performing loans held by the country's banks hit an 18-year high of 8.72% in April. Italian yields were +10.6 bps at 6.03% at midday in Europe, while a rally in EU shares and U.S. futures - inspired by the Greek election results (see below) - started to fizzle out fairly quickly. Now read: 3 Ways To Trade The Greek Election Results »

Greece's "Pro-bailout" parties win enough seats for majority. Greece's New Democracy party is attempting to form a coalition after winning 129 seats in the 300-seat parliament, although the socialist Pasok group hasn't decided whether to join the government or just offer parliamentary support. Together, the two broadly pro-bailout parties hold 162 seats, providing a relatively comfortable majority of 24. Now read: Why Austerity Isn't Working For Greece »

Microsoft, Barnes & Noble to build tablet. Strategic partners Microsoft (MSFT) and Barnes & Noble (BKS) will today announce plans to build a tablet/e-reader focused on entertainment, TechCrunch reports. The tablet, which will be unveiled at an event in Los Angeles, could be the first non-Xbox device to have Xbox live streaming potential. Other reports say Microsoft will unveil plans to make its own Windows 8 tablets. Now read: Microsoft Soaring On New Healthcare Push »

Top Stock News
KKR eyes £8B U.K. cellular carrier. KKR (KKR) is reportedly in early stage talks to buy U.K. mobile operator Everything Everywhere from France Telecom (FTE) and Deutsche Telekom (OTCPK:DTEGF) for £8B. Leading the private-equity firm's team is former Everything Everywhere boss Tom Alexander. "Preposterous," a banker tells Reuters. Alexander tried to get P-E firms interested six months ago but had no joy, and "financing markets are even worse right now." Now read: How Long Can France Telecom Maintain This Dividend? »

Major lenders could rake in $12B with Harp scheme. Wells Fargo (WFC), JPMorgan (JPM) and other banks could generate up to $12B in revenue this year by refinancing mortgages under HARP, a federal program designed to help struggling homeowners. In contrast, borrowers who refinance through HARP stand to save between $2.5B-$5B. Now read: The Opportunity In Mortgage Servicing Rights »

Small banks want out. Fed up with new regulations and weak loan demand, a growing number of small community banks are looking to sell themselves to larger rivals. More than 90 bank mergers have already been announced this year. Now read: Winners Among Smaller Regional Banks »

Melrose in talks to buy Elster for $2.3B. British buyout group Melrose has confirmed that it's in negotiations to acquire German gas-and-electric meter company Elster Group (ELT) from CVC Capital for $2.3B. The potential offer of $20.50 per ADS would represent a 25% premium to Elster's closing price on Friday.

Top Economic & Other News
G20 could increase firewall. The G20, which is due to start a two-day parley in Mexico today, could increase the IMF's firewall beyond the $430B agreed upon in April, Mexican President Felipe Calderon said over the weekend. The group is also considering measures that will include cutting debt for some countries and pledges of more stimulus by others, Bloomberg reports.

U.S., EU could pursue free-trade deal. U.S. and EU officials will decide whether to pursue a free-trade agreement by the end of the month. Such a deal could jump-start growth in both regions while completely sidestepping the austerity vs. stimulus debate.

Hollande's socialists win majority in lower house. President Francois Hollande's socialist bloc yesterday won 314 out of the 577 seats available in elections for France's lower house of parliament, meaning that Hollande won't have to rely on parties such as the hard left Leftist Front to get his program through. That includes cutting the budget deficit to 3% from 4.5%.

Clock ticking as Iran and world powers meet again. Iran and the P5+1 world powers are meeting for a third time since April over the country's nuclear program, but as with the previous discussions, hopes aren't high that the sides will reach an agreement. There's just two weeks to go until the EU's embargo on Iranian oil is due to take full effect.

Today's Markets:
In Asia, Japan +1.8%. Hong Kong +1%. China +0.4%. India -1.4%.
In Europe, at midday, London +0.4%. Paris +0.1%. Frankfurt +0.7%.
Futures at 7:00: Dow -0.3%. S&P -0.3%. Nasdaq flat. Crude -1% to $83.22. Gold -0.4% to $1621.10.

Today's economic calendar:
10:00 NAHB Housing Market Index

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Source: Wall Street Breakfast: Must-Know News