German stocks rose for the first time in six days, rebounding from an 18-month low, amid speculation that Federal Reserve Chairman Ben S. Bernanke will take steps to bolster the U.S. recovery.
Deutsche Telekom AG (DTE) jumped 4.8 percent and Wacker Chemie AG (WCH), the second-largest producer of solar-grade silicon, rallied 3.4 percent after analysts raised their recommendations for telecommunications and solar-power companies. MAN SE (MAN), Europe’s third-largest truckmaker, gained 2.2 percent.
The DAX Index (DAX) advanced 58.6, or 1.1 percent, to 5,532.38 at the 5:30 p.m. close in Frankfurt. The gauge dropped 8.6 percent last week as concern escalated that the global economy is slowing and as the leaders of the euro area failed to restore investor confidence. The broader HDAX Index (HDAX) rose 1 percent today.
“Everybody wants to know what the Fed is going to do,” said Markus Wallner, a senior equity strategist at Commerzbank AG in Frankfurt. “Investors are eager to hear whether the Fed will make any hints regarding a third round of quantitative easing, which would inspire the markets. However, it should still remain a volatile week.”
The DAX is trading at 8.4 times the estimated earnings of its constituent companies, near the cheapest valuation since October 2008, according to Bloomberg data.
Central bankers will meet on Aug. 26 at an annual conference sponsored by the Fed Bank of Kansas City. Bernanke said at last year’s meeting the Fed was prepared to “do all that it can” to ensure economic recovery and suggested that it would purchase more securities if growth slowed.
German investor confidence fell more than forecast in August to the lowest in more than 2 1/2 years. The ZEW Center for European Economic Research in Mannheim said its index of investor and analyst expectations, which aims to predict developments six months in advance, dropped to minus 37.6 from minus 15.1 in July. That’s the lowest since December 2008. Economists had predicted a decline to minus 26, according to the median of 36 estimates in a Bloomberg News survey.
A separate report showed that a manufacturing purchasing managers’ index for Germany, Europe’s largest economy, unexpectedly held at 52 in August. Economists had projected a drop to 50.6, according to the median forecast in a Bloomberg News survey. A reading above 50 signals expansion.
The number of registered job vacancies in Germany slipped in the second quarter, signaling that companies are hiring fewer people as economic growth weakens. The economy had 974,000 vacancies in the second quarter, about 80,000 less than in the first quarter, the Federal Labor Agency’s IAB research unit reported. Germany’s economy almost stalled in the second quarter, growing 0.1 percent.
Deutsche Telekom, Europe’s largest phone company, jumped 4.8 percent to 9.56 euros after Barclays Plc upgraded the telecommunications industry to “overweight.”
Wacker Chemie surged 3.4 percent to 95.53 euros and Manz AG, the maker of machinery for the solar-panel industry, soared 4.7 percent to 22.91 euros after Goldman Sachs Group Inc. raised the stocks to “buy” from “neutral.” The brokerage also upgraded Centrotherm Photovoltaics AG (CTN), the maker of solar production equipment, to “buy” from “sell.” Centrotherm’s shares rallied 5.8 percent to 23.13 euros.
MAN, BMW, Continental
MAN rallied 2.2 percent to 59.16 euros as Volkswagen AG (VOW) said it submitted a merger control filing for MAN to the European Commission. The carmaker said it expects to receive regulatory approval in the second half of the year. Volkswagen increased 2.6 percent to 104.40 euros.
Bayerische Motoren Werke AG (BMW) climbed 2.6 percent to 51.37 euros after WestLB AG raised the company’s shares to “add” from “neutral.”
Continental AG (CON), Europe’s second-largest auto-parts supplier, added 1.8 percent to 45.96 euros.
Bayer AG (BAYN) rose 1.8 percent to 44.18 euros after the Leverkusen-based chemical maker said the U.S. Food and Drug Administration granted fast-track designation to the Alpharadin drug that the company has developed with Algeta ASA to treat castration-resistant prostate cancer.
Deutsche Lufthansa AG (LHA), Europe’s second-biggest airline, slipped 1.9 percent to 10.60 euros and Air Berlin Plc (AB1) plunged 10 percent to 2.55 euros after Deutsche Bank AG cut the shares to “hold” from “buy” and to “sell” from “hold,” respectively.
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