German Stocks Advance for Third Day as Utilities Climb

German stocks advanced for a third day, erasing losses in the final minutes of trading, as shares of utilities rallied and investors weighed data that showed U.S. retail sales increased for the ninth consecutive month.

RWE AG climbed 5 percent after a court ruled that a forced shutdown of its nuclear plant was unlawful. Celesio AG (CLS1) tumbled 4.4 percent after McKesson Corp. failed to get support from the German drug distributor’s shareholders for a takeover. Infineon Technologies AG (IFX) fell 1.4 percent after Goldman Sachs Group Inc. and Sanford C. Bernstein & Co. lowered their ratings on Europe’s second-largest semiconductor maker. Volkswagen AG (VOW) declined 2.4 percent after UBS AG advised selling the shares.

The DAX Index (DAX) rose 0.3 percent to 9,540.51 at the close of trading in Frankfurt, having earlier dropped as much as 1.4 percent. The benchmark trades at 13.2 times the estimated earnings of its constituents, more than the five-year average of 11.7, after rallying 29 percent in 2012 and 25 percent in 2013. The broader HDAX Index added 0.2 percent today.

Retail sales in the world’s largest economy rose in December by more than economists estimated. Purchases increased 0.2 percent last month after a 0.4 percent advance in November that was smaller than previously reported, Commerce Department figures showed. The median forecast in a Bloomberg survey had called for a 0.1 percent gain.

RWE, EON

RWE jumped 5 percent to 26.81 euros. The power producer plans to sue for damages over the forced shutdown of its Biblis nuclear plant after a court ruled it was unlawful. The Federal Administrative Court rejected the complaints of the state of Hesse, which ordered the closure of Biblis A and B in the aftermath of the 2011 Fukushima disaster in Japan.

EON SE advanced 2.9 percent to 13.51 euros as the company notified the city of Hamburg of its interest to bid for a power-grid concession, EON’s North German EON Hanse unit said in an e-mailed statement.

Daimler AG rose 1.2 percent to 63.63 euros. The U.S. Supreme Court threw out a case against Daimler over a company unit’s alleged collaboration in torture and killings in Argentina.

Deutsche Telekom AG gained 1.8 percent to 12.42 euros, posting the biggest gain since Dec. 19.

Celesio tumbled 4.4 percent to 23.10 euros. McKesson, the largest U.S. drug distributor, said its offer of 23.50 euros a share failed to obtain the backing of 75 percent of Celesio’s stock needed for the deal to go through. McKesson may seek a joint venture with the European wholesaler Chairman and Chief Executive Officer John H. Hammergren said yesterday at a conference in San Francisco.

Infineon, Volkswagen

Infineon fell 1.4 percent to 7.56 euros. Goldman Sachs downgraded Europe’s second-biggest semiconductor maker to neutral from buy. Its stock price reflects the industry-wide recovery over the last year and the potential for more gains is limited, the brokerage wrote. Infineon rose 27 percent in 2013. Separately, Sanford C. Bernstein lowered its recommendation to market perform, similar to hold, from outperform.

Preferred shares of Volkswagen declined 2.4 percent to 197.80 euros. UBS lowered its rating on Europe’s largest carmaker to sell from neutral, saying the company’s investments to meet emission and capital norms may hurt earnings.

Fraport AG fell 0.8 percent to 54.66 euros. Barclays Plc lowered the operator of the Frankfurt airport to equal weight, a rating similar to hold, from overweight. The brokerage said the company may be unable to increase its dividend given its investments including spending on a new terminal.

To contact the reporter on this story: Inyoung Hwang in London at ihwang7@bloomberg.net

To contact the editor responsible for this story: Cecile Vannucci at cvannucci1@bloomberg.net

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