German Stocks Advance Before Release of Fed Minutes
German stocks rose for a second day as investors awaited the minutes of last month’s Federal Reserve meeting for signs of further measures to stimulate the world’s biggest economy.
EON AG and RWE AG (RWE), Germany’s biggest utility companies, rose after peer Vattenfall AB filed a legal complaint over the shutdown of nuclear reactors in Germany. Daimler AG and Bayerische Motoren Werke AG paced declines in auto companies after U.S. truckmaker Cummins Inc. reduced its revenue forecast. Solarworld AG dropped 3.6 percent after peer Centrotherm Photovoltaics AG sought bankruptcy protection.
The DAX Index (DAX) added 0.2 percent to 6,453.85 at the close in Frankfurt. The index has climbed 8.1 percent from its 2012 low on June 5 as Greece formed a new government and European Union leaders agreed to directly recapitalize Spanish banks using the euro area’s permanent bailout fund. The broader HDAX Index was little changed today.
“The U.S. central bank will return to centre stage this evening,” said Ben Critchley, a sales trader at IG Index in London. “There remains some hope that this central bank will commit itself to further easing later in the year.”
The Fed is scheduled to release the minutes of its June meeting at 2 p.m. in Washington. The Federal Open Market Committee said on June 20 it will expand its Operation Twist program to extend the maturities of assets on its balance sheet,
Companies in the benchmark Stoxx Europe 600 Index will earn 23.95 euros a share in fiscal 2012, according to analyst estimates compiled by Bloomberg. The projections have been cut from more than 25 euros a share at the beginning of the year, the data show.
In the U.S., profits for companies listed on the Standard & Poor’s 500 Index fell 1.8 percent in the second quarter, according to analyst estimates compiled by Bloomberg. That would be the first decline since 2009, even as revenue is forecast to rise 2.5 percent. Analysts project profit growth of 3.9 percent and 15 percent, respectively, in the third and fourth quarters of 2012.
A Commerce Department report showed the U.S. trade deficit narrowed in May, with the gap shrinking 3.8 percent to $48.7 billion from a revised $50.6 billion in April. Purchases from abroad fell to the lowest level in three months, while exports climbed to the second-highest on record.
EON climbed 2.1 percent to 17.52 euros and RWE AG gained 1.6 percent to 33.65 euros after Vattenfall, the fourth-largest power supplier in Germany, filed a complaint with the Federal Constitutional Court over Chancellor Angela Merkel’s phase-out of atomic energy. EON and RWE previously filed complaints with the court.
Gerresheimer AG jumped 3.6 percent to 38.34 euros after it said that full-year revenue will rise by 9 percent to 10 percent, compared with a previous forecast of 7 percent to 8 percent. Second-quarter profit and sales beat analyst estimates, led by growth in emerging markets.
Vehicle makers declined after Cummins said late yesterday it expects 2012 revenue to be “in line” with the 2011 level. Cummins had said in February that 2012 revenue would rise 10 percent compared to the previous year.
A gauge of auto companies the second-worst performer of the 19 industry groups in the Stoxx Europe 600 Index. (SXXP) Daimler AG slipped 0.8 percent to 35.32 euros and BMW lost 1 percent to 56.59 euros.
Solarworld slid 3.6 percent to 1.22 euros after Centrotherm sought bankruptcy protection, joining at least six other local companies that have foundered amid a glut in solar panels. The news is “negative for solar-equipment makers,” said Lauren Licuanan, an analyst at Commerzbank AG.
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