German stocks were little changed, after the benchmark fell to a three-week low, as investors watched U.S. negotiations over re-opening the government and raising the country’s borrowing limit.
Bayer AG rose 0.8 percent after saying it will accelerate the clinical development of five new drug candidates. Commerzbank AG (CBK) dropped 1.3 percent after Boersen-Zeitung cited board member Markus Beumer as saying that the lender’s corporate banking results in 2013 won’t be as good as in 2012.
The DAX Index (DAX) advanced 0.1 percent to 8,600.8 at 9:36 a.m. in Frankfurt. The equity benchmark slipped for a second week last week as a standoff between U.S. lawmakers led to the first government shutdown in 17 years. The broader HDAX Index also rose 0.1 percent today.
“Democrats and Republicans haven’t shown any sign of a potential agreement on the government shutdown or the debt ceiling,” Christoph Hock, an equity sales trader at Alpha Wertpapierhandels GmbH in Frankfurt, wrote in an e-mail. “Investors are caught between missing the big medium-term move on the upside and getting burned in the very short-term on the downside. That’s reflected in the recent spike of volatility.”
The VStoxx Index, which gauges the cost of protecting against swings on the Euro Stoxx 50 Index, slipped 0.2 percent to 20.11. The volume of shares changing hands in DAX-listed companies was 19 percent lower than the average of the last 30 days, according to data compiled by Bloomberg.
President Barack Obama reiterated that he won’t negotiate with Republicans over policy conditions tied to the federal budget and to raising the $16.7 trillion debt ceiling. Senate Majority Leader Harry Reid yesterday called for a vote on a clean funding plan to open the government without preconditions.
The Treasury has said that it will exhaust measures to avoid exceeding the borrowing limit on Oct. 17. If that happens, the government would run out of cash to pay all of its bills at some point between Oct. 22 and Oct. 31, according to the Congressional Budget Office.
Amid delayed U.S. economic reports, investors await financial results as an earnings release from Alcoa Inc. after the close of European trading today marks the unofficial start of the U.S. quarterly reporting season. JPMorgan Chase & Co. and Wells Fargo & Co. will also post results this week.
Exports (GRBTEXMM) in Germany, adjusted for working days and seasonal changes, increased 1 percent in August from July, when they fell a revised 0.8 percent, the Federal Statistics Office in Wiesbaden said today. Economists forecast a gain of 1.1 percent, according to the median of 16 estimates in a Bloomberg News survey. Imports rose 0.4 percent from July.
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