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European stocks dropped to their lowest level in four weeks as U.S. House Speaker John Boehner ruled out raising the federal government’s debt limit without setting preconditions.
The Stoxx Europe 600 Index slid 0.3 percent to 308.93 at 4:30 p.m. in London, after earlier falling as much as 1 percent. The gauge slipped 0.7 percent last week as the U.S. began its first partial government shutdown in 17 years on Oct. 1.
Boehner, the Republicans’ leader in the House of Representatives, continued to demand changes to President Barack Obama’s health-care act before agreeing to extend the borrowing authority. The Treasury has said it will exhaust measures to avoid exceeding the $16.7 trillion debt ceiling on Oct. 17. If that happens, the U.S. will run out of money to pay all of its bills at some point between Oct. 22 and Oct. 31, according to the Congressional Budget Office.
“We are not going to pass a clean debt limit,” Boehner said in an interview on ABC yesterday. “The votes are not in the House to pass a clean debt limit.”
Republican and Democrat lawmakers continued to clash over the emergency budget needed to end the shutdown. The move has placed thousands of federal employees on unpaid leave and closed down some services.
Obama has said he won’t negotiate over funding the federal government or raising the debt ceiling. The President has argued that the Republican-controlled House should not use either issue, which he described as basic functions of Congress, as points of leverage.
National benchmark indexes retreated in 14 of the 18 western-European markets.
FTSE 100 6,437.28 -16.60 -0.26% CAC 40 4,165.58 +1.33 +0.03% DAX 8,591.58 -31.39 -0.36%
Burberry dropped 1.4 percent to 1,605 pence after CEO Angela Ahrendts told Les Echos that “this Chinese slowdown is perhaps not an accident, but the new given.” The Asia Pacific region accounted for 39 percent of the company’s sales in the 12 months through March 2013.
SAP declined 2.3 percent to 52.85 euros. The world’s biggest enterprise-software company, along with Cisco Systems Inc. and Google Inc., has held talks to buy all or part of BlackBerry, Reuters reported, citing unidentified people familiar with the matter. The Canadian phonemaker had asked for expressions of interest from potential buyers as an alternative to the tentative agreement it reached with a financial group led by Fairfax Financial Holdings Ltd. on Sept. 23. Reuters said that SAP, Google and Cisco declined to comment.
Marks & Spencer Group Plc (MKS) declined 2.8 percent to 480.1 pence after Credit Suisse Group AG estimated that the U.K. food-and-clothing retailer’s same-store sales fell 1.5 percent in the second quarter of its financial year. The brokerage had forecast a 0.5 percent increase. Marks & Spencer reports its first-half results on Nov. 5.
Solvay gained 1.3 percent to 108.85 euros after saying it will buy Chemlogics for $1.35 billion in cash. The acquisition will generate cash and earnings in its first year, according to a statement by the Belgian maker of gelling agents used in hydraulic fracturing.
European Aeronautic Defence & Space Co. rose 2.2 percent to 50.30 euros after its Airbus SAS subsidiary won its first order from Japan Airlines Co.
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