DAX Index Retreats for Second Day; MAN, Deutsche Lufthansa Lead Declines
German stocks retreated for a second day as investors remained concerned about the strength of the economic recovery, even after companies in the DAX index reported earnings that beat estimates.
Deutsche Lufthansa AG and MAN SE led declining shares, both losing more than 3 percent. Merck KGaA led gains in the benchmark DAX Index after saying second-quarter net income advanced 69 percent and raising its forecast for 2010. Volkswagen AG, Europe’s largest carmaker, advanced 3.1 percent as second-quarter net income surpassed analysts’ estimates.
The DAX Index retreated 0.7 percent to 6,134.7, extending yesterday’s 0.5 percent decline. The measure has fallen 3.1 percent from this year’s high on April 26 amid concern that the economic recovery is losing steam as indebted European governments slash spending and China takes steps to cool its economy. The broader HDAX Index slipped 0.8 percent today.
“Everybody expected strong figures from MAN SE and is now selling on good news,” said Christian Falkner, an analyst at Alpha Wertpapierhandels AG in Frankfurt. “Some of Lufthansa’s competitors already reported good numbers, so investors had anticipated good Lufthansa earnings.”
Lufthansa, Europe’s second-biggest airline, tumbled 4.5 percent to 12.22 euros, even after reporting more than doubled quarterly profit. MAN SE, the region’s third-largest truckmaker, sank 3.9 percent to 70.12 euros, even after reporting a second straight quarter of profit as demand for heavy trucks in the region recovers.
Continental AG, Europe’s second-largest auto-parts supplier, lost 1.3 percent to 48.03 euros after posting second- quarter profit that missed analysts’ estimates. Net income was 121 million euros ($158.3 million), compared with a 190 million- euro loss a year earlier. Analysts had forecast profit of 187 million euros, according to the average of five estimates compiled by Bloomberg.
Puma AG sank 6.1 percent to 221.60 euros. Europe’s second- largest sporting-goods maker posted second-quarter profit below analysts’ estimates as the company’s European sales benefited less from the soccer World Cup than its rivals.
Gildemeister AG dropped 4 percent to 10.63 euros. The German cutting-tool maker founded in 1870 reported a second- quarter net loss of 4.3 million euros compared with a profit of 3.2 million euros a year earlier.
Merck, Volkswagen Gain
Merck surged 4.6 percent to 67.16 euros, its largest gain since June 2009. The maker of drugs and chemicals said net income climbed to 183.4 million euros from 108.5 million euros a year earlier. Core earnings, which exclude costs such as writedowns and merger expenses, were 1.44 euros a share, beating the 1.36 euros average estimate of 17 analysts surveyed by Bloomberg.
Volkswagen rallied 3.1 percent to 80.99 euros, its highest price since October 2009, after the carmaker reported its biggest quarterly net income in two years on higher demand in China and the U.S. for the Golf compact and Audi A5 coupe.
Second-quarter net income quadrupled to 1.25 billion euros from 283 million euros a year earlier. Profit beat the 721 million-euro median estimate of nine analysts surveyed by Bloomberg News. Sales rose 22 percent to 33.2 billion euros.