10-17-13 9:14 AM EDT | Email Article

By Sara Sjolin, MarketWatch


LONDON (MarketWatch) -- European stock markets broke a five-day winning streak on Thursday, after U.S. lawmakers agreed to end the government shutdown and raise the debt ceiling, but failed to come up with a longer-term solution for the country's finances.


The Stoxx Europe 600 index fell 0.2% to 314.91, after closing at the highest level in more than five years on Wednesday.


Among notable movers in the pan-European index, shares of Outotec Oyj sank 15% after the Finnish engineering firm lowered its guidance for sales and operating-profit margin for 2013 due to macroeconomic uncertainty and payment delays.


Shares of Royal KPN NV slid 8.6% after America Movil SAB de CV (AMX) said late Wednesday it won't make a buyout bid for the Dutch telecom firm.


On a more upbeat note, shares of SABMiller PLC (SBMRY) gained 3.9% after the brewer said first-half revenue rose 4%.


More broadly, investors looked to the U.S., where lawmakers ended a standoff at the 11th hour, agreeing to reopen the government after a 16-day shutdown, and to raise the debt ceiling in an effort to avoid a technical default. The deal will finance the government only until Jan. 15 and raise the borrowing limit until Feb. 7, sparking concerns that Congress is just kicking the can down the road.


"In terms of work to do, the budget needs to be renegotiated within two months, the government will be reopened and funded for just three months and the debt-ceiling issue pushed back for four months. The muted market reaction... suggests them already pricing in a standoff re-run in December, January and February," said Mike van Dulken, head of research at Accendo Markets, in a note.


U.S. stocks surged on Wednesday, but stock futures pointed to a lower open on Thursday. Futures extended losses after data showed jobless claims fell less than forecast last week.


Germany's DAX 30 index lost 0.7% to 8,784.04, retreating from an all-time closing high reached on Wednesday.


France's CAC 40 index fell 0.6% to 4,219.80, while the U.K.'s FTSE 100 index dropped 0.3% to 6,554.46.


Outside the major indexes, shares of Nestle SA (NSRGY) climbed 2.8% after the KitKat maker said it is now on track to reach annual organic growth of "around 5%," in line with its long-standing target of between 5% and 6%.


-Sara Sjolin; 415-439-6400; AskNewswires@dowjones.com


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10-17-13 0914ET

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