German Stocks Retreat; Deutsche Boerse, HeidelbergCement Fall

German stocks fell for a third day as U.S. lawmakers called off a vote on a Republican plan to increase the government’s debt limit and as a report showed the U.S. economy grew less than forecast in the second quarter.

Deutsche Boerse AG, which is seeking to buy NYSE Euronext to create the world’s largest exchange operator, fell 1.8 percent after posting second-quarter profit that missed analysts’ estimates. HeidelbergCement AG, the world’s third-biggest maker of cement, lost 1 percent after saying second-quarter profit slumped 10 percent.

The benchmark DAX Index slid 0.4 percent to 7,158.77 at the 5:30 p.m. close in Frankfurt, retreating 2.3 percent this week. The gauge posted its largest monthly retreat since March, sliding 3 percent, as investors speculated that Europe’s sovereign-debt crisis will derail the economic recovery and as concern mounted that U.S. politicians will fail to lift the federal government’s debt ceiling by next week’s deadline. The broader HDAX Index also tumbled 0.4 percent today.

“It’s been a Hollywood-style debt debate which has frustrated markets,” said Daniel Weston, a portfolio adviser at Schroeder Equities GmbH in Munich. “No one can pinpoint precisely what the outcome will be, but the market is certainly hoping for a debt-ceiling increase and more clarity very soon.”

House Republican leaders scrapped a vote on the debt-ceiling bill late yesterday, indicating that House Speaker John Boehner is short of the votes needed to pass his bill. The delay fueled concern that Republicans and Democrats will fail to reach a compromise before the Treasury Department’s Aug. 2 deadline for a possible U.S. default.

German stocks pared some of their losses after President Barack Obama said Republicans and Democrats are in “rough agreement” on their plans to raise the debt limit.

U.S. Economic Growth

A report today showed that U.S. gross domestic product climbed at a 1.3 percent annual rate following a 0.4 percent gain in the previous quarter that was revised down from a previous estimate of 1.9 percent. The median forecast of economists surveyed by Bloomberg News called for a second-quarter increase of 1.8 percent.

In Europe, Moody’s Investors Service placed Spain’s Aa2 credit rating on review for a possible downgrade as its regional governments struggle to cut their budget deficits.

Deutsche Boerse slipped 1.8 percent to 51.64 euros, its fifth straight decline for the longest falling streak in seven weeks. The company said net income rose to 178.8 million euros ($257 million) from 160.8 million euros a year earlier. That fell short of the average analyst estimate for profit of 191.4 million euros, according to data compiled by Bloomberg.

HeidelbergCement, Deutsche Bank

HeidelbergCement dropped 1 percent to 38.45 euros, its lowest price in almost nine months. Second-quarter operating income decreased to 441 million euros from 492 million euros, the company said. That missed the average estimate of 480 million euros in a Bloomberg survey of analysts.

EON AG and RWE AG, Germany’s biggest utilities, slid 1 percent to 19.22 euros and 1.5 percent to 36.55 euros, respectively. Utility shares fell across Europe today as Veolia Environnement SA, the world’s biggest water utility, said it will miss its 2011 net income growth target.

GEA Group AG jumped 4.8 percent to 24.27 euros, their largest advance in almost six months. The company raised its order intake forecast for this year to 5.4 billion euros to 5.6 billion euros and its revenue prediction to 5.1 billion euros to 5.3 billion euros, including acquisitions.

Before it's here, it's on the Bloomberg Terminal. LEARN MORE