May 15 (Bloomberg) -- German stocks declined to the lowest since January after Greek political leaders failed to form a government and the Mediterranean nation decided to hold elections again.
Merck KGaA dropped to a two-month low after saying first-quarter profit fell 49 percent. Sky Deutschland AG jumped 8.7 percent after first-quarter revenue beat estimates.
The DAX Index fell 0.8 percent to 6,401.06 at the close in Frankfurt, after earlier rising as much as 0.9 percent. The DAX has dropped 10.6 percent from its March 16 high, which some analysts define as a correction. The broader HDAX Index slid 0.7 percent today.
“As the probability of a Greek default and exiting of the euro rises, investors have to continually reassess all possible implications,” said Daniel Weston, a portfolio adviser at Schroeder Equities GmbH in Munich.
Greece will hold new elections after President Karolos Papoulias failed to mediate a governing coalition following an inconclusive May 6 vote, raising concern it may exit the euro.
The political impasse means the new vote will have to be held as early as next month, with polls showing the anti-austerity Syriza group leading. The country may run out of money by early July.
Stocks earlier advanced after a report showed the German economy grew five times as fast as economists forecast in the first quarter.
Gross domestic product rose 0.5 percent from the fourth quarter, when it fell 0.2 percent. Economists predicted a 0.1 percent gain, according to the median of 40 estimates in a Bloomberg News survey.
Germany’s growth helped the euro area avoid its second recession in three years. GDP in the 17-nation euro region stagnated in the latest quarter compared with the prior three months, the European Union’s statistics office in Luxembourg said. The median forecast in a Bloomberg survey called for a 0.2 percent contraction.
In the U.S., the Federal Reserve Bank of New York’s general economic index increased to 17.1 this month from 6.6 in April. The median estimate in a survey of Bloomberg economists called for an increase to 9. Readings greater than zero signal expansion in the so-called Empire State Index, which covers New York, northern New Jersey and southern Connecticut.
Other reports today showed that retail sales rose in April at the slowest pace of the year and consumer prices were unchanged, restrained by a drop in energy prices.
Merck, Deutsche Bank
Merck KGaA fell 2.8 percent to 76.41 euros, the lowest price since March 7, after the German maker of the Erbitux cancer drug reported a decline in first-quarter profit and forecast cost savings that trailed analysts’ estimates.
Deutsche Bank AG and Commerzbank AG, Germany’s two largest banks, fell 1.7 percent to 29.38 euros and 5.2 percent to 1.44 euros respectively.
Daimler AG, the world’s third-largest maker of luxury cars, dropped 1.5 percent to 37.93 euros.
HeidelbergCement AG, the world’s third-largest maker of cement, fell 3.1 percent to 35.45 euros. Deutsche Lufthansa AG slid 3.6 percent to 8.70 euros.
Hamburger Hafen & Logistik AG tumbled 9 percent to 20.99 euros. The company which handles more than two-thirds of cargo containers in Hamburg, cut its sales forecast for 2012 after reporting a 41 percent drop in first-quarter profit because of terminal modernization costs.
Xing AG slid 3.9 percent to 50 euros. The German business networking website operator was cut to underweight, the equivalent of sell, from overweight at HSBC.
Sky Deutschland Revenue
Sky Deutschland AG jumped 8.7 percent to 2.11 euros after it said first-quarter revenue beat estimates. The company’s first-quarter loss narrowed to 75 million euros from 87 million euros during the same time last year.
ThyssenKrupp AG added 1.6 percent to 16.01 euros. Germany’s largest steelmaker is in talks with two potential buyers for the Federn automotive suspension business as it concentrates on chassis development.
Centrotherm Photovoltaics AG, a manufacturer of solar equipment rallied 8.5 percent to 5.75 euros. The stock was raised to neutral, the equivalent of hold, from underweight at HSBC Holdings Plc.
Wirecard AG gained 3.2 percent to 13.89 euros. The maker of electronic-payment and risk-management software confirmed its profit guidance for 2012, saying it is “very optimistic” about the full year.
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