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U.S. Stocks Drop on Budget Concern; Euro, Treasuries Gain

U.S. stocks fell, pulling the Standard & Poor’s 500 Index down from a two-month high, as federal budget negotiations deteriorated. Global equities reached a 17-month high and the euro rose as German business confidence grew.

The S&P 500 lost 0.8 percent to 1,435.81 at 4 p.m. in New York after yesterday closing at the highest level since Oct. 18. Trading volume was 6.6 percent above the 30-day average. The MSCI All-Country World Index gained for a third day, rising 0.2 percent to the highest since July 2011. Ten-year Treasury yields slipped two basis points to 1.80 percent after reaching an almost two-month high yesterday. The euro touched an eight-month high versus the dollar. Energy led commodities higher after U.S. supply data.