Stocks were little changed in choppy trade on Tuesday after a key vote in Italy's parliament clouded the political future of Prime Minster Silvio Berlusconi and raised the stakes in the European debt crisis.

The possibility of change at the top of Italy's government was the latest turn in the long-simmering euro zone sovereign debt crisis.

Berlusconi won a vote on the ratification of the budget, but he failed to obtain an absolute majority in the Chamber of Deputies, leading to calls for him to step down.

The outcome of the vote was not much of a surprise. The big question now is what will happen to Berlusconi and who will replace him, said James Dailey, portfolio manager at Team Asset Strategy Fund in Harrisburg, Pennsylvania.

This is a period of significant uncertainty in general. People just don't know what to do.

The Dow Jones industrial average .DJI was down 33.83 points, or 0.28 percent, at 12,034.56. The Standard & Poor's 500 Index .SPX was down 0.97 point, or 0.08 percent, at 1,260.15. The Nasdaq Composite Index .IXIC was down 0.60 points, or 0.02 percent, at 2,694.65.

The PHLX Europe sector index .XEX, which includes major European shares, advanced 0.4 percent.

Italian 10-year borrowing costs rose to a record 6.74 percent, raising the risk that Rome's massive debt -- the second highest in Europe at 120 percent of gross domestic product -- could spiral out of control.

With little on the U.S. economic calendar this week and earnings season drawing to a close, investors' attention was fixed on Europe. According to Thomson Reuters data, of the 442 S&P 500 companies that have reported earnings, 70 percent topped expectations.

U.S. markets have been closely tied to the fortunes of the euro while volatility has been tethered to sovereign debt. The euro hit a session high against the dollar ahead of the Italian vote.

In corporate news, an experimental antidepressant from AstraZeneca Plc and Targacept Inc failed to meet the goal of changing a key depression rating score in the first of a series of pivotal clinical trials. Targacept shares plunged 57 percent to $8.19 after Rockwell Automation Inc's quarterly profit and 2012 outlook beat analysts' estimates, sending its shares up 7.1 percent to $74.76.

Activision Blizzard Inc advanced 1 percent to $13.88 as the video-game maker began selling the highly anticipated new entry in its Call of Duty series.