MARKETS SHUDDER ON EUROPE VOTES

-THE MARKETS…Global financial markets slumped sharply this morning following election results in France and Greece that threw fresh uncertainty into the Eurozone's fiscal crisis. The Greek ASE Composite Index fell nearly 8 percent before bouncing back slightly, the French CAC fell 1.4 percent, and the German DAX fell 1.8 percent. Asian markets fell nearly three percent across the board. The Euro has hit a three-month low. As Jean FIEVET writes, "Welcome to the political backlash from austerity-weary electorates in Europe, which means more uncertainty over the euro crisis…Francois Hollande plans to flip the trend of budget-tightening that has dominated Europe, causing investors to question whether his new tack will solve or worsen the debt crisis. In Greece, the two main parties that support austerity have suffered massive losses and may not be able to form a viable government and keep economic reforms on track." Update - just before U.S. markets open: After a very bad morning, the euro is looking slightly less bruised in early afternoon trading - and while Greek equities are still having a bad day, other European markets have turned positive.

-THE RESULTS - SARKOZY'S END, ETC…In Greece, voters cast ballots for parties on the far left and the far right - including some neo-Nazi groups - that have opposed budget cuts, handing losses to the two main parties that have pledged to follow harsh international bailout terms. In France, President Nicolas Sarzoky lost his reelection battle to socialist Francois Hollande - who challenged harsh austerity measures as the way forward in that country. Sarzoky became the tenth European leader to lose his job as a result of the economic climate.

-KRUGMAN: IT'S GOOD NEWS…Nobel laureate Paul Krugman sees silver linings here. He does not think this weekend's election results are a worst-case scenario. Quite the contrary - in a New York Times op-ed he contends Europe's current path of austerity was unlikely to work - instead, Krugman argues the only way to solve the continent's financial crisis is to break up the euro. "Believe it or not, (this means) both the euro and the European project now have a better chance of surviving than they did a few days ago," he writes.

MESSAGE FROM AMERICAN HELD BY AL QAEDA

Al Qaeda released a video message from American contractor Warren Weinstein, who's apparently being held captive in Pakistan. In the video, Weinstein seems to be in good health - oddly relaxed, even - and appears in front of a tray of food. He reassures his family he is being taken care of and pleads with President Obama to meet the demands of his captors (not stated) and secure his release.

HUGO CHAVEZ AILING

Joe GOLDMAN reports that a well-plugged-in blogger - Venezuelan journalist Nelson Bocaranda - writes that he is pretty much giving up all hope for President Hugo Chavez's recovery from cancer. He even seems to be doubting that Chavez can last long, and claims that in this latest trip to Cuba for treatments (the tenth this year) Cuban doctors basically told Chavez that it was hopeless to continue treatments in the affected pelvis, firstly because that area has been massacred by the treatments (he has a broken femur due to the rays) and secondly due to the spreading throughout Chavez' body. Bocaranda, a Chavez supporter, has had a blog known for its optimism in the face of cancer.

PUTIN INAUGURATED (AGAIN)

Quite a scene in Moscow today. As Kirit RADIA reports: Vladimir Putin was sworn in as Russia's president for the third time today - but it looked a little different this time around. Yes, there was caviar and vodka - Russia's "inauguration splendor" as Russia Today calls it - and overall a truly gilded ceremony. But outside St. George's Hall, protesters gathered in Pushkin Square after police blocked off the avenues along Putin's route to the Kremlin. Riot police broke up that gathering, arresting protesters as they went. At this hour, police are still preventing people from walking along the main pedestrian streets in central Moscow. This comes a day after tens of thousands of protesters turned out for the largest and most confrontational anti-Putin protest since they began in December. Before leaving the Kremlin, Putin received a briefcase containing the codes for Russia's nuclear arsenal.

AFGHAN WAR

-SECRET U.S. PROGRAM RELEASES AFGHAN DETAINEES…The Washington Post reports the U.S. has been secretly releasing high-level detainees from a military prison in Afghanistan as part of negotiations with insurgent groups. The program has served as a live diplomatic channel even as a peace deal with the Taliban has failed, but the releases are a gamble. The freed detainees are often notorious fighters who must promise to give up violence in order to be released. Officials would not say whether those who have been released under the program have later returned to attack U.S. and Afghan forces once again.

ANOTHER "GREEN ON BLUE" ATTACK…As Martha RADDATZ reports, there was another "green on blue" attack over the weekend in which an attacker in an Afghan Army uniform killed one service member in southern Afghanistan. It's believed the shooting happened after a dispute broke out between coalition and Afghan forces. Officials have not yet released the nationality of the soldier who was killed.

-SOLDIER KILLED IN AFGHANISTAN WHILE SKYPING WITH HIS WIFE…The family of a U.S. Army nurse who died last week in Afghanistan says he was having a Skype video chat with his wife when he suddenly pitched forward and collapsed and that she saw a bullet hole in a closet behind him. The latest - the Army says there was no bullet wound found on Captain Bruce Clark's body - and no sign of foul play. The investigation continues.

-THREE SERVICEMEN KILLED… Three NATO soldiers have been killed in Eastern Afghanistan today - apparently in an IED attack.

CHEN - WHAT NEXT?

Chinese Defense Minister General Liang Guangli is in Washington today to meet with counterpart Leon Panetta about the Chinese dissident Chen Guangcheng. As the Wall Street Journal writes, Gen. Liang's visit, the first by a Chinese minister of defense in nine years, suggests Beijing and Washington are both anxious to limit the political fallout of last week's diplomatic imbroglio. Meanwhile, Chen spoke to Reuters and the BBC today, saying he has entrusted hospital staff to help him handle the paperwork necessary for him and his family to obtain documents to travel to the U.S., but he remains unsure how long it will take for his travel arrangements to be made. Worth noting that Jon Huntsman, former GOP presidential candidate and former U.S. ambassador to China, writes an op-ed in today's Wall Street Journal. He says the stakes for today's meeting are high, "There is no other relationship in the world that, if mismanaged, carries greater long-term negative consequences for the U.S., the Asia-Pacific region and the world."

SECRETARY OF STATE CLINTON IN INDIA

Secretary of State Hillary Clinton continues her India tour today, meeting with Indian Prime Minister Singh and his national security advisor later this morning in New Delhi. Earlier today during a stop in Calcutta, Clinton urged India to reduce its Iranian oil imports. She also said that the U.S. believes al Qaeda leader Ayman al-Zawahiri is hiding somewhere in Pakistan. On a later note, she also answered questions about her own political ambitions, saying she has no desire to make another run for the White House, but hopes to see a female president in her lifetime.

SYRIA: TO THE POLLS

President Assad's regime is touting today's parliamentary elections as a sign of his willingness to pursue political reform, but the opposition has dismissed today's vote as sham. As Alex MARQUARDT reports, these are the first multi-party elections in 50 years and the first since the new constitution was passed, allowing candidates from outside the Baath party.

EARLY ELECTIONS IN ISRAEL

As speculated, Haaretz reports Israeli Prime Minister Benjamin Netanyahu announced early elections will be held September 4. The elections come more than a year ahead of schedule. Last week, the New York Times cited these likely early elections as a sign an Israeli attack on Iran may not be as imminent as earlier thought.

TORNADO AFTERMATH

From Akiko FUJITA in Tokyo: Meteorologists say more tornadoes could be in the forecast, after rare twisters in Tsukuba and Ibaraki Prefecture killed a teenage boy and injured more than 4 dozen others yesterday. The largest tornado was roughly 9 miles wide. All totaled, the twisters damaged 900 homes with wind speeds that clocked in over 150 miles an hour. The 14 year old boy that died was crushed, when his home collapsed. Today, rescue crews were out with Self-Defense forces searching through the rubble - a scene that has become all too familiar in Japan. While tornadoes are not as familiar to the Japanese as earthquakes, typhoons, and tsunamis, the Japan Meteorological Agency reports there were roughly 40 windstorms classified as tornadoes last year.

SOUTH AFRICA: TAKING ON GAY RIGHTS

South Africa's City Press newspaper reports an organization representing the country's traditional leaders has asked the government to remove a clause granting equal rights to gays and lesbians from the constitution. The National House of Traditional Leaders submitted the request to parliament's constitutional review committee. The group says the ruling party, the African National Congress (ANC), knows the "great majority" of South Africans do not support gay rights and says it could lose votes over the issue. In response, the ANC released a statement affirming its support for constitutional protection against government discrimination based on sexual orientation. South Africa is the only African country to permit gay marriage, but gays and lesbians still face frequent discrimination and harassment in much of the country.

CURRY A CANCER-KILLER?

The BBC reports a chemical found in curry will be tested for its ability to kill bowel cancer tumors. Researchers will investigate whether giving curcumin alongside chemotherapy drugs is effective.

COMING TO AMERICA

Prince Harry is in Washington D.C. today where he'll attend the Warrior Games Reception (3:30p ET) to meet competitors from the event held for wounded soldiers. Later, he attends the Atlantic Council Awards Dinner, where he will receive the Distinguished Humanitarian Leadership award.

CHINESE SCHOOL HOOKS STUDENTS UP TO IVs TO CRAM FOR EXAMS

A Chinese high school has reportedly given their students IVs to help them prepare for exams. Photos show students at Xiaogan No.1 High School in Hubei province hooked up to IV drips of amino acids ahead of their all-important college entrance exams. Watch here.