German Stocks Are Little Changed; Continental Drops
Stock Chart for Continental AG (CON)
Continental AG (CON) dropped after the tiremaker said first- quarter sales fell more than estimated. RWE AG (RWE) and EON SE, Germany’s largest utilities, advanced as investors bought stocks less reliant on economic growth.
The DAX Index (DAX) lost 0.6 percent to 7,696.49 at 11:05 a.m. in Frankfurt. The broader HDAX Index (HDAX) also fell 0.6 percent. Stocks on Friday snapped a two-day rally after Cyprus was said to seek an increase in bailout funds and a report showed and U.S. retail sales unexpectedly declined.
“We are getting reaction to China’s data; in conjunction with U.S. data of late, it is pointing to a stalled world economy,” said Ioan Smith, a strategist at Knight Capital Europe Ltd. in London. “All the money printing in the world may inflate asset prices, but there will be far fewer buyers for anything that could be considered real.”
The DAX has advanced 16 percent in the past year as central banks from the U.S. to Europe sought to stimulate growth by cutting interest rates and buying bonds. Policy makers from the Federal Reserve and the Bank of England said last weekend they see few signs of equity price bubbles in the U.S. and the U.K., countering criticism that record stimulus is stoking excessive risk-taking. The index has gained 1.1 percent this year.
Gross domestic product in China rose 7.7 percent from a year earlier, the National Bureau of Statistics said in Beijing today. That compares with the 8 percent median forecast in a Bloomberg News survey of 41 analysts and 7.9 percent in the fourth quarter. March industrial production increased less than estimated while retail-sales growth matched forecasts.
Manufacturing in the New York region expanded for a third month in April, a report at 8:30 a.m. local time may show. The Federal Reserve Bank of New York’s general economic index slowed to 7 this month from 9.2 in March, economists forecast in a Bloomberg News survey.
Continental declined 0.9 percent to 87.03 euros. Sales last quarter dropped more than the 1 percent-to-3 percent range Europe’s second-largest maker of auto parts had forecast, Spokeswoman Antje Lewe said in a phone interview. The company reiterated its 2013 sales target of 5 percent growth.
RWE gained 1.1 percent to 30.58 euros. EON climbed 1.6 percent to 14.72 euros. A gauge of European utilities rose 0.8 percent, for the biggest gain among the 19 industry groups in the broader Stoxx Europe 600 Index. (SXXP)
Barclays Plc raised its recommendation on EON to overweight, the equivalent of buy, from equal weight, saying investors are not focusing enough on its distribution activities, and citing scope for increased dividend payments.
Deutsche Telekom AG, Germany’s biggest phone operator, rose 1.3 percent to 8.89 euros. Dish Network Corp. Chairman Charlie Ergen informally approached Deutsche Telekom about a possible merger with the German company’s T-Mobile USA Inc. unit, according to people close to the situation.
The volume of shares changing hands in companies on the DAX was 1.6 percent higher than the average of the last 30 days, data compiled by Bloomberg showed.
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