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German Stocks Decline Amid Earnings Reports; EON Drops

German stocks declined, paring a two-day advance that saw the DAX Index (DAX) reach a record, as U.S. lawmakers reached agreement on ending the debt-limit impasse and brokers downgraded companies.

Deutsche Telekom AG (DTE), Germany’s biggest telephone-service provider, fell 1.6 percent after Bank of America Corp. cut its rating. EON AG, Germany’s largest utility, fell 2.3 percent after UBS AG reduced its recommendation on the stock.

The DAX Index slipped 0.3 percent to 8,816.6 at 9:31 a.m. in Frankfurt. The gauge has still rallied 2.6 percent so far this month, extending its 2013 increase to 16 percent, amid optimism that U.S. Congress would end the fiscal impasse and Janet Yellen, nominated to head the Federal Reserve, won’t rush to withdraw stimulus. The HDAX Index lost 0.3 percent today.

“The index can’t make new highs every day,” Ion-Marc Valahu, a co-founder and fund manager at Clairinvest in Geneva, wrote in an e-mail. “Even though we got a deal in the U.S., the shutdown has damaged sentiment.”

In the U.S., President Barack Obama signed into law a measure to extend the nation’s borrowing authority into early 2014 and end the government shutdown that started Oct. 1. The deal avoided a default of the world’s biggest economy and means that federal workers will return to their jobs from today.

To contact the reporter on this story: Jonathan Morgan in Frankfurt at jmorgan157@bloomberg.net

To contact the editor responsible for this story: Andrew Rummer at arummer@bloomberg.net

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