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American challengers BMW Oracle lost their first race at the Louis Vuitton Cup in Valencia as Desafio Espanol secured an impressive victory. But Oracle did recover well, beating Team New Zealand in their second race to stay at the top of the rankings.
Desafio cimbed up to fourth place in the table.
"We proved we can compete with the big teams and it was a great performance to beat the only boat with a 100% record," said Desafio team head Agustin Zulueta.
"We must keep our feet on the ground but we demonstrated we can withstand the pressure of the big races."
The Spanish team finished a minute ahead of their opponents for the surprise win.
Italians Luna Rossa Challenge are two points behind Oracle in second place, with Team New Zealand are in third.
Oracle looked to be back to their best as they beat Team New Zealand by 38 seconds.
"It was a very shifty day out there - we saw fortunes come and go very quickly in a number of races," said Oracle skipper Chris Dickson.
"In our race against Desafio they did a nice job of getting in front and staying in front. We kept looking for an opportunity and didn't get one. They had a well-deserved win."
Round robin standings (after 11 flights)
BMW Oracle Racing 21
Luna Rossa Challenge 19
Emirates Team New Zealand 18
Desaf�o Espa�ol 2007 17
Mascalzone Latino - Capitalia Team 14
Victory Challenge 14
Team Shosholoza 12
Areva Challenge 9
+39 Challenge 6
United Internet Team Germany 3
China Team 1