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Portuguese Bonds Drop as Prime Minister Quits Over Budget Cuts

Portuguese notes tumbled, leading declines in Europe, as the resignation of Prime Minister Jose Socrates stoked concern the government is moving closer to seeking a bailout.

Two-year Portuguese yields reached the highest since 1999 amid concern the country may struggle to repay about 9 billion euros ($12.7 billion) of debt due by June. Portuguese bonds stayed lower after Fitch Ratings cut the nation’s long-term foreign and local currency rating to A- from A+. Greek bonds declined, while German bunds were little changed.