German Stocks Drop as U.S. Lawmakers Prolong Debt Impasse
German stocks declined from a record as U.S. politicians remained divided over an agreement to raise the debt limit before a deadline on Thursday to avoid a default.
Infineon Technologies AG (IFX) slipped 2.3 percent after Bank of America Corp. lowered its recommendation on the chipmaker. SAP AG (SAP) lost 1.2 percent after software maker Dassault Systemes SA posted worse-than-forecast revenue. EON SE and RWE AG (RWE), Germany’s biggest utilities, climbed after a report that they have asked political parties to reduce a tax on nuclear fuel.
The DAX Index (DAX) fell 0.3 percent to 8,701.72 at 10:33 a.m. in Frankfurt. The equity benchmark jumped 2.4 percent in the past two trading days to a record amid optimism over U.S. debt talks. The broader HDAX Index retreated 0.2 percent today.
In the U.S., Democrats and Republicans held talks over the weekend without reaching an agreement to resolve a fiscal impasse three days before the government exhausts its borrowing authority. If that happens, the U.S. would run out of cash to pay all of its bills at some point between Oct. 22 and Oct. 31, according to the Congressional Budget Office. The stalemate also prolongs a federal government shutdown that began on Oct. 1.
Democrat and Senate Majority Leader Harry Reid held inconclusive talks with Minority Leader Mitch McConnell yesterday. Senators plan to reconvene at 2 p.m. in Washington today, and the Republican-controlled House of Representatives at noon, with no votes until 6.30 p.m. local time.
“The discussions were substantive and we’ll continue those discussions,” Reid said on the Senate floor, before leaders concluded almost four hours of debate without a deal.
In China, a report on Oct. 12 showed that exports unexpectedly contracted in September, falling 0.3 percent from a year earlier. The median forecast of economists in a Bloomberg survey had called for a gain of 5.5 percent.
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