RIO DE JANEIRO, Brazil (CNN) -- Despite a failing economy, Brazilian
                  voters chose to stick with the steady, familiar leadership of Henrique
                  Cardoso as he headed for a second term -- the first Brazilian president ever
                  re-elected.

                  On Monday, with 61 percent of the ballots counted Monday, Cardoso was
                  leading with 51 percent, apparently winning a first-ballot victory to avoid a
                  second-round runoff.

                  His closest rival, Luiz Inacio Lula da Silva of the leftist Workers Party had
                  34.2 percent, while Ciro Gomes of the Popular Socialist Party had 11
                  percent. Nine other candidates shared the rest.

                  Also at stake in the elections were 27 governorships, all 513 federal
                  deputies, one-third of the 81-seat Senate and 1,405 state legislature seats.

                  Cardoso will face a tough task: to rein in the international financial crisis that
                  began in Asia and now threatens his country, he is expected to slash
                  government spending and may increase taxes.

                   Voting was mandatory for the 106 million Brazilians who were eligible to
                   vote. For the first time, more the half of the votes were cast using electronic
                   voting machines. The electronic votes tallied within 24 hours, but the rest
                   weren't to be counted until Friday, electoral officials said.

                  Cardoso's margin of victory was expected to grow after the paper
                  ballots -- cast mostly in rural regions traditionally loyal to the
                  government -- were tallied.

                  "The result is much closer than expected, but I think Cardoso will end up
                  with something between 53 and 54 percent as votes from the small towns
                  come in," said David Fleischer, a professor of political science at Brasilia
                  University.

                   A proven reformer

                  Cardoso's popularity stems largely from his success in taming inflation from
                  around 2,400 percent when he first took office to near zero now.

                  But economic woes in Russia and Asia have caused investors to lose
                  confidence in Cardoso's inflation-taming measures, resulting in the loss of
                  $30 billion in investment since mid-August.

                  Brazil's budget deficit also ballooned to $60 billion, while the government
                  has raised interest rates to about 50 percent to stem the flow of capital flight.

                  To cope with the crisis, Cardoso has promised tough measures -- such as
                  tax hikes and budget cuts -- that could erode his popularity.

                  "It's very good for Brazil that the president has received this mandate from
                  the Brazilian people and that he can now do what is needed to protect the
                  real (Brazil's currency) and the Brazilian people," said Foreign Minister Luis
                  Felipe Lampreia.

                  U.S. support

                  Neighboring countries and the United States are concerned about any
                  drastic devaluation in Brazil, which accounts for 45 percent of Latin
                  America's total economic output.

                  Finance Minister Pedro Melan is heading negotiations with International
                  Monetary Fund for an emergency loan package reportedly worth $30
                  billion.

                  "The election results seem to be a statement of support for reform, and it's
                  important for them to get on with the reforms that they've been considering,"
                  said U.S. White House spokesman Joe Lockhart.

                       The Associated Press and Reuters contributed to this report.