Aug. 4 (Bloomberg) -- Germany's benchmark DAX Index fell for a second day, led by shares of Bayerische Motoren Werke AG and DaimlerChrysler AG.

``The auto sector has been the best performer in the past few weeks,'' said Lars Ziehn, an analyst at WestLB in Dusseldorf who has a ``neutral'' rating on DaimlerChrysler shares. ``Investors are taking profits.''

The DAX lost 37.91, or 0.8 percent, to 4885.21 as of 1:59 p.m. in Frankfurt. Twenty of the benchmark's 30 shares slid. DAX September futures fell 0.8 percent. The HDAX Index of the country's 110 biggest companies dropped 0.7 percent.

The German benchmark lost 0.2 percent yesterday after closing on Aug. 2 at its highest in more than three years.

``The DAX has surpassed our full-year target already, and there's still five months to go,'' said Nicola Facciorusso, an equity sales trader at Sal. Oppenheim jr. & Cie. KgaA in Munich, adding the index is overdue for a consolidation.

The European Central Bank left its benchmark interest rate at 2 percent for a 26th month today as increasing signs of an economic recovery alleviate the need for lower borrowing costs.

BMW fell 2.2 percent to 37.13 euros. Shares of the world's second-largest luxury carmaker dropped 4.2 percent yesterday after the company posted its second quarterly decline in profit. DaimlerChrysler, the No. 5 carmaker, fell 1.7 percent to 40.63 euros. The shares have gained 12 percent in a week after the company reported better-than-expected earnings.

Car shares outperformed all other industry groups in the Stoxx 600 Index in the mast month, rising 9.2 percent.

Shares of Commerzbank AG rose 2.8 percent to 19.86 euros, their highest in more than three years. Germany's third-biggest bank by assets yesterday posted second-quarter net income that beat analysts' expectations, driving the shares up 5.9 percent.

``This year, the bank's earnings were driven by operating profit, where before they were driven by the sale of assets,'' said Giuseppe Amato, equity strategist at Lang & Schwarz Wertpapierhandel AG. ``Maybe now the bank is seen as a more attractive takeover target. The old merger rumor is driving the stock up today.''

The following stocks are also making gains or losses. Stock symbols are in parentheses after the company names.

Aixtron AG (AIX GY), the world's largest maker of machines that coat semiconductors, dropped 20 cents, or 6.5 percent, to 2.88 euros. Aixtron cut its full-year sales forecast after it posted a second consecutive quarterly loss.

Depfa Bank Plc (DEP GY) added 34 cents, or 2.6 percent, to 13.44 euros. Deutsche Bank AG raised the share recommendation for Europe's second-largest provider of public finance to ``buy'' from ``hold.''

Deutsche Bank AG (DBK GY) rose 45 cents, or 0.6 percent, to 71.57 euros. UBS AG raised its recommendation on Europe's third-largest bank to ``buy'' from ``neutral.'' Morgan Stanley lifted the bank's share-price forecast 5.3 percent to 80 euros.

Epcos AG (EPC GY), a maker of electronic components, dropped 86 cents, or 7.1 percent, to 11.20 euros. The company reported a fiscal third-quarter net loss of 8 million euros compared with net income of 14 million euros a year earlier.

``There are still no signs of a significant and sustained recovery in business,'' the company said in a statement.

Fresenius Medical Care AG (FME GY), the world's biggest provider of kidney dialysis, added 37 cents, or 0.5 percent, to 73.07 euros. Second-quarter net income rose 15 percent to $116 million, while sales gained 8 percent to $1.67 billion. Analysts surveyed by Bloomberg News expected profit of $115 million on $1.69 billion in sales.

Linde (LIN GY), Europe's largest maker of forklifts, added 1.17 euros, or 2 percent, to 60.47 euros. Second-quarter net income more than doubled to 108 million euros and sales rose to 2.34 billion euros from 2.33 billion euros. Analysts surveyed by Bloomberg News predicted net income of 101 million euros and sales of 2.26 billion.

Munich Re (MUV2 GY), the world's largest reinsurer, said second-quarter profit fell 74 percent to 164 million euros, the first decline in two years, as the company increased reserves at its U.S. unit to cover casualty and asbestos policies. Profit fell short of the 365 million-euro median estimate of 13 analysts surveyed by Bloomberg.

Paragon AG (PGN GY), a maker of sensors used in cars, buildings and industrial machines, climbed 1.27 euros, or 8.9 percent, to 15.45 euros. Paragon said first-half earnings before interest and tax rose 26 percent to 2.9 million euros, helped by increased sales at its automotive division.

To contact the reporter on this story: Chris Fournier in Frankfurt at Cfournier3@bloomberg.net

Last Updated: August 4, 2005 08:02 EDT