European stocks rose, erasing their decline in the final two hours of trading, as the Republican leader of the U.S. House of Representatives was said to agree to a Senate proposal to increase the government’s debt limit.

The Stoxx Europe 600 Index advanced 0.2 percent to 315.55 at the close, rebounding from a decline of as much as 0.6 percent. The equity benchmark climbed to its highest level since Sept. 19 yesterday even as the U.S. Treasury said it will exhaust extraordinary measures to keep the country’s borrowing within a debt limit by tomorrow.

Senate Majority Leader Harry Reid, a Democrat, and Minority Leader Mitch McConnell, a Republican, restarted talks late yesterday on a deal to prevent a default. The proposed agreement would also reopen the federal government, which has been closed since Oct. 1.

National benchmark indexes climbed in 14 of the 18 western-European markets. The U.K’s FTSE 100 advanced 0.3 percent and Germany’s DAX added 0.5 percent. France’s CAC 40 (CAC) Index decreased 0.3 percent.

Danone slid 2.3 percent to 51.83 euros. Comparable revenue in the three months through September gained 4.2 percent from a year earlier, the Paris-based company said in a statement. That missed the median of 15 analysts’ estimates of 4.8 percent. Danone also said that its revenue from baby-nutrition products in Asia has declined following the product scare.

LVMH dropped 4.3 percent to 138.70 euros. The Paris-based company said late yesterday that third-quarter revenue advanced to 7.02 billion euros ($9.5 billion) from 6.9 billion euros. Analysts had predicted 7.24 billion euros, according to the median of 15 estimates.

Ubisoft Entertainment SA sank 26 percent to 8.19 euros, the biggest tumble since its initial public offering in 1996. Electronic Arts Inc.’s smaller French rival cut its full-year sales forecast by as much as a third and predicted an operating loss after delaying the release of two major games.

U.S. stock-index futures gained as lawmakers rushed to lock up an agreement on raising the debt limit before tomorrow’s deadline.

Global Stocks:

Nikkei  14,467.14 +25.60 +0.18%

Hang Seng 23,228.33 -108.19 -0.46%

Shanghai Composite 2,193.07 -40.34 -1.81%

FTSE  6,537.12 -11.99 -0.18%

CAC  4,226.01 -30.01 -0.71%

DAX 8,805.23 +0.79 +0.01%

Crude oil $100.95 -0.26%

Gold $1279.60 +0.50%

Upgrades:

Downgrades:

FedEx (FDX) downgraded to Neutral from Buy at Buckingham Research

Other:

Apple (AAPL) added to short term buy list at Deutsch Bank

Apple (AAPL) target raised to $580 from $560 at Canaccord Genuity

Home Depot (HD) initiated with Buy at Sun Trust Rbsn Humphrey

European stocks declined from their highest level in almost four weeks as U.S. lawmakers continued to discuss raising the federal government’s debt limit. U.S. index futures gained, while Asian shares fluctuated.

The Stoxx Europe 600 Index retreated 0.3 percent to 313.93 at 8:51 a.m. in London after Fitch Ratings put the U.S. on watch for a possible credit downgrade late yesterday. Standard & Poor’s 500 Index futures gained 0.5 percent, while the MSCI Asia Pacific Index slipped less than 0.1 percent.

The Republican House of Representatives Speaker John Boehner attempted to influence the outcome of the fiscal showdown with a proposal that would reopen the government through Dec. 15, rather than Jan. 15 as the Senate plans. The U.S. will exhaust extraordinary measures to keep borrowing below its debt ceiling tomorrow, according to the Treasury.

Senate Majority Leader Harry Reid and Minority Leader Mitch McConnell restarted negotiations late yesterday on a deal to end the government shutdown and prevent a default.

Senate Talks

“Senator Reid and Senator McConnell have re-engaged in negotiations and are optimistic that an agreement is within reach,” a spokesman for Reid said in a statement. They had suspended their talks, while they waited for the House to act on Boehner’s plan.

Danone fell 3.6 percent to 51.11 euros. The Paris-based company said baby-nutrition revenue fell in the three months through September after recalling infant formula in Asia. Like-for-like revenue gained 4.2 percent from a year earlier, Danone said in a statement, missing the median of 15 analysts’ estimates of 4.8 percent.

LVMH declined 5 percent to 137.60 euros. The Paris-based company said late yesterday that revenue advanced to 7.02 billion euros ($9.5 billion) from 6.9 billion euros. Analysts had predicted 7.24 billion euros, according to the median of 15 estimates compiled by Bloomberg. Sales climbed 8 percent, excluding acquisitions, disposals and currency moves. That missed the 10 percent gain predicted by analysts.

Publicis Groupe SA slipped 1.9 percent to 58.53 euros. The company, which plans to merge with Omnicom Group Inc. to form the world’s biggest advertising firm, reported slower third-quarter sales growth because of weaker spending on adverts in China. Revenue rose 3 percent to 1.68 billion euros from a year earlier, according to a statement. Excluding currency fluctuations and acquisitions, sales climbed 3.5 percent. They had increased 5 percent in the previous quarter.

Ubisoft Entertainment SA sank 24 percent to 8.48 euros. Electronic Arts Inc.’s smaller French rival cut its full-year sales forecast by as much as a third and predicted an operating loss after delaying the release of two major games.

FTSE 100 6,504.59 -44.52 -0.68%

CAC 40 4,216.97 -39.05 -0.92%

DAX 8,784.1 -20.34 -0.23%

Asian stocks swung between gains and losses as U.S. lawmakers resumed talks to avoid a default ahead of tomorrow’s deadline to raise the debt ceiling.

Nikkei 225 14,467.14 +25.60 +0.18%

Hang Seng 23,228.33 -108.19 -0.46%

S&P/ASX 200 5,262.91 +3.76 +0.07%

Shanghai Composite 2,193.07 -40.34 -1.81% 154.64k

Techtronic Industries Co., a maker of power tools that gets about 73 percent of sales from North America, slipped 3 percent in Hong Kong.

Japan Tobacco Inc., Asia’s largest listed cigarette maker, slid 2 percent on a report on how much it would raise prices after the nation’s sales-tax increase disappointed investors.

GungHo Online Entertainment Inc. jumped 16 percent in Tokyo after the game developer and its parent SoftBank Corp. agreed to buy 51 percent of Finland’s Supercell Oy.

Nikkei 225 14,441.54 36,80 0,26%

Hang Seng 23,336.52 118,20 0,51%

S & P / ASX 200 5,259.15 51,28 0,98%

Shanghai Composite -4,36 -0,19 2,233.41%

FTSE 100 6,549.11 +41.46 +0.64%

CAC 40 4,256.02 +33.06 +0.78%

DAX 8,804.44 +80.63 +0.92%

Dow 15,168.01 -133.25 -0.87%

Nasdaq 3,794.01 -21.27 -0.56%

S&P 500 1,698.06 -12.08 -0.71%