European Stocks Decline Second Day on U.S. Shutdown

Bloomberg (03/10) -- European stocks declined for a second day, as a shutdown of the U.S. government continued and a gauge of service-industry activity in the world’s biggest economy fell more than forecast. Gerresheimer AG lost 2 percent as Credit Suisse Group AG lowered its recommendation on the shares. Schneider Electric SA fell 3.2 percent. Aviva Plc advanced 1.4 percent as the insurer said it generated $2.6 billion from the sale of its U.S. business. BP Plc rose 1.1 percent after a U.S. appeals court ordered a reconsideration of key terms of a settlement in the 2010 Gulf of Mexico oil spill case. The Stoxx Europe 600 Index slipped 0.4 percent to 309.55 at the close of trading, the lowest level since Sept. 9. The equity benchmark yesterday fell by the most since Aug. 30. It has still rallied 11 percent this year as central banks around the world pledged to leave interest rates low for a prolonged period. U.S. President Barack Obama and congressional leaders yesterday failed to break a budget impasse in their first face-to-face negotiations since the government began its first partial shutdown in 17 years on Oct. 1. The standoff raises concern the budget dispute may affect talks to increase the $16.7 trillion debt ceiling by Oct. 17 so as to avoid a default. The halt has placed as many as 800,000 federal employees on unpaid leave. A partial shutdown lasting one week would probably shave 0.1 percentage point from economic growth, according to the median estimate of economists in a Bloomberg survey, with the costs accelerating if the closure persists.