German Stocks Drop, With DAX Trimming Weekly Gain; Bayer Falls

German stocks retreated, with the benchmark DAX Index trimming its fifth weekly advance, as Bayer AG and Deutsche Telekom AG dropped and U.S. home sales rose less than economists had forecast.

Bayer and Deutsche Telekom decreased more than 1 percent as analysts downgraded the stocks. Commerzbank AG, Germany’s second-biggest lender, jumped 6.3 percent, leading rising shares.

The DAX slipped 11.87, or 0.2 percent, to 6,404.39 at the close in Frankfurt, its first drop this week. The gauge posted a 4.3 percent weekly rally as Spain and France sold bonds at lower yields and a report showed that fewer Americans than predicted had filed claims for jobless benefits. The broader HDAX Index also dropped 0.2 percent today.

“It’s not a surprise the market is a bit tired at these levels after a good run,” said Markus Steinbeis, head of equity portfolio management at the Unterfoehring, Germany-based unit of Pioneer Investments KGmbH, which oversees about $221 billion globally. “The overall mood is that the ECB will step in if necessary, reducing the systemic risk. In my view, the weakness is more an opportunity to buy.”

A report today showed sales of previously owned U.S. homes rose to 4.61 million in December. That fell short of the median estimate of 75 economists for an increase to 4.65 million sales.

Greek officials and private creditors meet for a third day to seek agreement on a debt swap. Finance Minister Evangelos Venizelos said the government held “long and substantial” discussions with Institute of International Finance Managing Director Charles Dallara yesterday.

Greek Debt Swap

Greece’s government and creditors have reached an initial agreement for a voluntary debt swap, Proto Thema reported on its website, without saying how it got the information. The parties agreed new bonds to replace existing Greek debt with a 30-year maturity, carrying a coupon beginning at 3.1 percent, reaching 3.9 percent and going as high as 4.75 percent, the Athens-based newspaper said.

Bayer declined 1.3 percent to 53.52 euros as Germany’s largest drugmaker was downgraded to “neutral” from “buy” at Nomura Holdings Inc.

Deutsche Telekom lost 1.4 percent to 8.82 euros as the phone company was cut to “hold” from “add” at Commerzbank.

RWE AG, Germany’s second-largest utility, slid 2.6 percent to 26.94 euros. Profit margins at coal-fired plants in Germany may slide as much as 15 percent as more renewable energy and fossil-fuel plants boost capacity in Europe’s biggest market this year and next, Societe Generale SA said.

Commerzbank jumped 6.3 percent to 1.72 euros, extending yesterday’s 15 percent gain. The lender yesterday said it had reached more than halfway to its goal of raising capital and can find all the remaining money without asking for state aid.

Lenders have until the end of today to tell national regulators how they plan to meet their capital targets. The European Banking Authority, the agency that drew up the rules, will discuss the findings at meetings with supervisors in London on Feb. 8-9, it said.

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