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German Stocks Fall; HeidelbergCement, Merck Shares Drop

Aug. 19 (Bloomberg) -- German stocks retreated for a second day, reversing an earlier rally, as disappointing economic reports in the U.S. overshadowed an increased growth forecast for Germany from the Bundesbank.

HeidelbergCement AG dropped 3.4 percent after the world’s second-biggest cement maker, Holcim Ltd., said second-quarter net income fell.

The DAX Index lost 1.8 percent to 6,075.13 at the 5:30 p.m. close in Frankfurt. The gauge has retreated 4.4 percent from this year’s high on Aug. 9 as the Federal Reserve said the pace of recovery in the U.S. economy will probably be “more modest” than forecast. The broader HDAX Index fell 1.7 percent today.

“Now that the earnings season is nearly over, investors are focusing on macroeconomic figures and those are mostly negative,” said Markus Wallner, senior equity strategist at Commerzbank AG in Frankfurt. “There’s no real direction at the moment and stocks react really quickly upwards or downwards to economic data. The DAX could go back to 6,000, but the fourth quarter should be better for equities.”

U.S. initial jobless claims rose by 12,000 to 500,000 in the week ended Aug. 14, Labor Department figures showed today in Washington. Claims exceeded all estimates of economists surveyed by Bloomberg News. The number of people receiving unemployment insurance fell, while those getting extended benefits increased.

Manufacturing Shrank

A separate report showed manufacturing in the Philadelphia region unexpectedly shrank in August for the first time in a year, a sign factories are being hurt by the U.S. economic slowdown.

The index of U.S. leading indicators rose in July for the second time in four months, extending a see-saw pattern that indicates slower growth through the end of the year.

The DAX earlier rallied as much as 0.7 percent after the Bundesbank raised its growth forecast for the country in 2010 as the economy expanded in the second quarter at the fastest pace since reunification.

HeidelbergCement, the world’s largest maker of aggregates used to produce concrete and asphalt, lost 3.4 percent to 34.43 euros. Holcim said net income dropped to 399 million Swiss francs ($386 million) from 453 million francs a year earlier. The average estimate of five analysts surveyed by Bloomberg was for 561 million francs. Sales rose 11 percent to 6.16 billion francs.

Merck Declines

Merck KGaA declined 2 percent to 68.06 euros as AlphaValue SAS cut its recommendation on the drugmaker to “reduce” from “add.”

Roth & Rau AG, the manufacturer of equipment to produce photovoltaics, retreated 6.5 percent to 22.25 euros, its lowest price since the start of July as other European photovoltaic companies also fell. PV Crystalox Solar Plc shares tumbled the most in 15 months in London trading after the silicon-wafer maker said first-half net income fell 59 percent.

Sixt AG surged 3.2 percent to 17.90 euros as the car-rental company returned to first-half net profit, posting net income of 25.7 million euros ($32.9 million) after a loss of 22.4 million euros in the year-earlier period.

To contact the reporters on this story: Julie Cruz in Frankfurt at

To contact the editors responsible for this story: David Merritt at

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