European stocks fell for a second day as investors weighed an accord between U.S. lawmakers to limit automatic spending reductions and avoid another government shutdown, as well as a possible cut in Federal Reserve stimulus.

U.S. Congressional negotiators reached a budget accord to limit automatic spending cuts for the next two years, remove the risk of a government shutdown like the one in October and cut the deficit by as much as $23 billion. Both the Senate and the House of Representatives must pass the deal.

The compromise, worked out between chief negotiators Senator Patty Murray and Representative Paul Ryan, would set spending at about $1.01 trillion in the current fiscal year, higher than the $967 billion required in a 2011 budget plan.

Investors are also considering when the Federal Reserve, which meets next week, may reduce the pace of its monthly bond buying. Twelve out of 35 economists surveyed by Bloomberg on Dec. 6 predicted that Fed policy makers will begin to slow the asset-buying program at their Dec. 17-18 meeting. Nine said the central bank will buy fewer bonds from its January meeting and the remaining 14 said that tapering will start in March.

National benchmark indexes retreated in 16 of the 18 western European markets. The U.K.’s FTSE 100 slid 0.2 percent, France’s CAC 40 dropped 0.1 percent and Germany’s DAX lost 0.4 percent.

Royal Bank of Scotland Group Plc lost 2.9 percent as Nathan Bostock said he will quit as chief financial officer.

Imagination Technologies Group Plc tumbled 24 percent to 190 pence, its lowest price since October 2009, after posting half-year sales that missed analysts’ estimates. The U.K. designer of chip technology for phones and tablets said sales rose to 85.2 million pounds ($139.6 million) in the period to Oct. 31, compared with the 93.3 million average estimate compiled by Bloomberg.

Natixis SA climbed 3.1 percent to 4.02 euros. Exane BNP Paribas raised its rating on the stock to outperform, similar to a buy recommendation, from neutral, citing a potential capital return and high payouts for shareholders. The French bank will probably have a dividend yield of 3.9 percent this year and 5.7 percent next year, according to data compiled by Bloomberg.

Stagecoach Group Plc advanced 2.8 percent to 372 pence, extending its gains this year to 21 percent. The bus and train operator said six-month adjusted earnings increased to 14.6 pence per share, exceeding the average analyst estimate for profit of 13.7 pence per share.

U.S. stock-index futures were little changed, after Congressional negotiators reached a budget agreement that will limit spending cuts and reduce the deficit.

Global markets

Nikkei 15,515.06 -96.25 -0.62%

Hang Seng 23,338.24 -405.95 -1.71%

Shanghai Composite 2,204.17 -33.33 -1.49%

FTSE 6,549.07 +25.76 +0.39%

CAC 4,126.11 +34.97 +0.85%

DAX 9,141.29 +26.85 +0.29%

Crude oil $98.34 (-0.17%).

Gold $1258.40 (-0.21%).

European stocks advanced, after yesterday’s drop, as investors weighed an accord between U.S. lawmakers to limit automatic spending cuts and avoid a government shutdown. U.S. index futures were little changed, while Asian shares fell.

The Stoxx Europe 600 Index added 0.2 percent to 315.67 at 11:09 a.m. in London. The equity gauge has rallied 13 percent this year as central banks around the world pledged to leave interest rates near record lows for a prolonged period of time.

U.S. Congressional negotiators reached a budget accord to limit automatic spending cuts for the next two years, remove the risk of a government shutdown like the one in October and cut the deficit by as much as $23 billion. Both the Senate and the House of Representatives must pass the deal.

The compromise, worked out between chief negotiators Senator Patty Murray and Representative Paul Ryan, would set spending at about $1.01 trillion in the current fiscal year, higher than the $967 billion required in a 2011 budget plan.

Investors are considering when the Federal Reserve, which meets next week, may reduce the pace of its monthly bond buying. Twelve out of 35 predicted that Fed policy makers will begin to slow the asset-buying program at their Dec. 17-18 meeting. Nine said the central bank will buy fewer bonds from its January meeting and the remaining 14 said that tapering will start in March.

Natixis climbed 4.5 percent to 4.08 euros. Exane BNP Paribas raised its rating on the stock to outperform, similar to a buy recommendation, from neutral, citing a potential capital return and high payouts for shareholders. The French bank will probably have a dividend yield of 3.9 percent this year and 5.7 percent next year.

Stagecoach Group Plc (SGC) advanced 3.9 percent to 376 pence, extending its gains this year to 22 percent. The bus and train operator said six-month adjusted earnings increased to 14.6 pence per share, exceeding the average analyst estimate for profit of 13.7 pence per share.

Imagination Technologies Group Plc (IMG) tumbled 17 percent to 207.5 pence, its lowest price since December 2009, after posting half-year sales that missed analysts’ estimates. The U.K. designer of chip technology for phones and tablets said sales rose to 85.2 million pounds ($139.9 million) in the period to Oct. 31, compared with the 93.3 million average estimate.

FTSE 100 6,541.19 +17.88 +0.27%

CAC 40 4,120.7 +29.56 +0.72%

DAX 9,135.49 +21.05 +0.23%

Asian stocks fell, with the regional benchmark gauge sliding for the first time in three days, as investors weighed the timing of a reduction in the Federal Reserve’s unprecedented stimulus.

Nikkei 225 15,515.06 -96.25 -0.62%

S&P/ASX 200 5,104.25 -39.30 -0.76%

Shanghai Composite 2,204.17 -33.33 -1.49%

OZ Minerals Ltd. slumped 14 percent, the most in almost five years, after the Australian copper miner forecast production will be lower than analyst estimates.

China Coal Energy Co., the nation’s No. 2 coal producer, dropped 4.1 percent in Hong Kong after the government said it plans to curb consumption of the fuel in some areas.

Gree Inc., a Japanese mobile-game operator, surged 2.3 percent after Goldman Sachs Group Inc. raised its outlook on the stock, citing bigger-than-expected cost cuts.

Nikkei 225 15,611.31 -38.90 -0.25%

Hang Seng 23,744.19 -66.98 -0.28%

S&P/ASX 200 5,143.55 -0.87 -0.02%

Shanghai Composite 2,237.49 -0.71 -0.03%

FTSE 100 6,523.31 -36.17 -0.55 %

CAC 40 4,091.14 -42.96 -1.04 %

DAX 9,114.44 -80.73 -0.88 %

Dow 15,973.13 -52.40 -0.33%

Nasdaq 4,060.49 -8.26 -0.20%

S&P 500 1,802.62 -5.75 -0.32%