German stocks rose, with the benchmark DAX Index rebounding from two days of losses, as business confidence unexpectedly surged to a record high and Porsche SE’s operating profit climbed more than sevenfold.
Bayerische Motoren Werke AG and Daimler AG rebounded after European carmakers posted the worst performance among 19 industry groups in the Stoxx Europe 600 Index yesterday. SAP AG fell after a federal jury in California decided the world’s largest maker of business application software must pay $1.3 billion to Oracle Corp. for copyright infringement.
The benchmark DAX Index rose 1.8 percent to 6,823.8 at the close in Frankfurt. The German gauge declined 2 percent in the two last trading days as investors speculated that a bailout for Ireland’s banks won’t stop the sovereign-debt crisis from infecting other European economies and North Korea lobbed shells at a South Korean island. The broader HDAX Index also gained 1.8 percent today.
“The German upswing is going on, perhaps with a higher speed than commonly expected,” said Bernd Weidensteiner, an economist at Commerzbank AG in Frankfurt. “We are very confident that the German economy will grow significantly next year.”
The Munich-based Ifo institute said its business climate index, based on a survey of 7,000 executives, rose to 109.3 this month from 107.7 in October. That’s the highest since records for a reunified Germany began in 1991. Economists predicted a decline to 107.5, according to the median of 42 forecasts in Bloomberg News survey.
Applications for unemployment benefits in the U.S. fell more than forecast last week to the lowest level since July 2008, reinforcing evidence the labor market is healing.
Consumer spending rose in October for a fifth month as a rebound in incomes lifted the biggest part of the U.S. economy at the start of the final quarter of 2010, Commerce Department figures showed today. Household purchases advanced 0.4 percent after a 0.3 percent gain in September that was larger than previously estimated. Incomes climbed 0.5 percent.
Ireland’s Finance Minister Brian Lenihan will today lay out a four-year deficit-cutting program as the government races to finish talks on aid with the International Monetary Fund and the European Union.
Porsche climbed 6.3 percent to 56.41 euros, gaining for a sixth day. Earnings before interest and tax advanced to 395 million euros ($526 million) between August and October compared with 52 million euros a year earlier, the Stuttgart, Germany-based manufacturer said. Sales increased 80 percent to 2.1 billion euros.
BMW, Daimler, VW
BMW, the world’s biggest maker of luxury cars, rose 4.7 percent to 59.12 euros, while Daimler, the second-largest, gained 5.1 percent to 52.04 euros.
Volkswagen AG climbed 4.5 percent to 124.35 euros. Europe’s biggest carmaker is creating a high-ranking management position with responsibility for developing new businesses related to the automobile industry, Handelsblatt reported, citing unidentified people in the company.
SAP slid 1 percent to 35.84 euros, a fourth day of declines. The verdict, which came after one day of deliberations, is the biggest ever for copyright infringement and the largest U.S. jury award of 2010, according to Bloomberg data. The award is about equal to SAP’s forecasted net income for the fourth quarter, excluding some costs, according to the average estimate of analysts surveyed by Bloomberg.
Deutsche EuroShop AG gained 2.3 percent to 25.93 euros as Germany’s largest shopping-center owner was raised to “buy” from “hold” at Bankhaus Lampe KG.
The company said it raised 132 million euros ($177 million) in gross proceeds from its rights offering, in its second capital increase this year.