German Stocks Slide for Second Day; Volkswagen, Lufthansa Drop

German stocks slumped for a second day as earnings from Volkswagen AG, Deutsche Lufthansa AG (LHA) and BASF SE (BAS) missed estimates and U.S. lawmakers moved no closer to agreeing a compromise to raise the federal debt limit.

Volkswagen AG sank 4.2 percent, its largest drop in almost three months. Lufthansa declined 2.8 percent as it posted operating profit that missed analyst estimates. BASF slid 4.2 percent. Siemens AG (SIE), Europe’s largest engineering company, slipped 1.1 percent after saying profit in the fiscal third quarter almost halved.

The DAX Index (DAX) retreated 62.62, or 0.9 percent, to 7,190.06 at the 5:30 p.m. close in Frankfurt. The gauge has retreated 4.5 percent since this year’s high on May 2 amid concern that Europe’s fiscal crisis will derail the economic recovery and as speculation mounted that U.S. lawmakers will fail to agree to increase the nation’s debt ceiling by next week’s deadline. The broader HDAX Index lost 1 percent today.

“Maybe the global economy is slowing and we are feeling the impact,” said Louise Cooper, a markets analyst at BGC Partners in London. “Investors are finally starting to become less complacent about the debt-ceiling deadline next week. The global macro situation is still dominating the thoughts of all in the markets.”

Volkswagen AG (VOW) slipped 4.2 percent to 138.05 euros as Europe’s largest carmaker said rising commodity prices and a strengthening euro will damp earnings gains this year. Volkswagen also posted second-quarter earnings before interest and taxes of 3.17 billion euros ($4.5 billion). That fell short of the 3.26 billion-euro average estimate of 14 analysts surveyed by Bloomberg.

Deutsche Lufthansa, Siemens

Lufthansa lost 2.8 percent to 14.07 euros. The airline posted profit that missed analysts’ estimates as fuel costs soared and uprisings in north Africa clipped demand.

Siemens slid 1.1 percent to 90.13 euros. The engineering company said profit in its fiscal third quarter fell 47 percent because of a fine tied to a nuclear-energy joint venture and charges at its health-care unit.

BASF declined 4.2 percent to 63.09 euros. The chemical maker reported second-quarter profit that fell short of analysts’ estimates and said that growth will slow in the second half.

Bayer AG (BAYN) dropped 1.2 percent to 56.85 euros as the aspirin maker reported second-quarter net income of 747 million euros, missing the 777.7 million average analyst estimate in a Bloomberg survey.

Siemens, BASF and Bayer are the three largest companies in Germany by index weighting, according to Bloomberg data.

Wacker Neuson SE (WAC) rallied 1.6 percent to 12.55 euros as the company raised its earnings forecast for 2011.

To contact the reporter on this story: Adam Haigh in London at ahaigh1@bloomberg.net

To contact the editor responsible for this story: Andrew Rummer at arummer@bloomberg.net

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