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German Stocks Decline as U.S. Data Outweighs Lufthansa

Oct. 31 (Bloomberg) -- German stocks fell as a measure of business activity in the U.S. climbed less than predicted, outweighing an increase in German retail sales and a rally by Deutsche Lufthansa AG.

Fresenius Medical Care AG retreated 4.4 percent after third-quarter earnings and revenue missed analysts’ estimates. Lufthansa surged 7.3 percent after reporting third-quarter operating profit that unexpectedly rose. Software AG added 1.3 percent after Barclays Plc upgraded its shares.

The DAX slid 0.3 percent to 7,260.63 at the close in Frankfurt, erasing an earlier advance of as much as 0.9 percent. The equity benchmark has still risen 0.6 percent in October and 22 percent from this year’s low on June 5. The broader HDAX Index also declined 0.3 percent today.

“What’s been driving the German market is the retail-sales figures,” said Alexander Kraemer, a cross-asset strategist at Commerzbank AG in Frankfurt. “The trigger for the change in sentiment this afternoon has been the Chicago PMI,”

German stocks rose the most in two weeks yesterday as Deutsche Bank AG reported profit that beat analysts’ estimates and Allianz AG increased its forecast.

Business activity in the U.S. unexpectedly contracted in October for a second month. The gauge from the Institute for Supply Management-Chicago Inc. rose to 49.9 from 49.7 in September. The median estimate of 54 economists surveyed by Bloomberg had called for a figure of 51. A reading of 50 is the dividing line between expansion and contraction.

Retail Sales

German retail sales increased for a second month in September as rising wages and unemployment near a two-decade low helped stimulate consumer spending.

Sales, adjusted for inflation and seasonal swings, rose 1.5 percent from August, when they advanced 0.1 percent, the Federal Statistics Office in Wiesbaden said today. Economists had forecast a gain of 0.3 percent, according to the median of 17 estimates in a Bloomberg News survey.

Euro-area finance ministers insisted that Greece implement spending cuts before it receives further aid from two international bailout programs.

“We called on the Greek authorities to solve remaining issues so as to swiftly finalize the negotiations,” Luxembourg Prime Minister Jean-Claude Juncker said in a statement after leading a two-and-a-half-hour conference call with the finance chiefs. He said the aim is “to conclude on the program” at a scheduled Nov. 12 meeting of the ministers in Brussels.

Fresenius Medical

Fresenius Medical Care fell 4.4 percent to 54.19 euros, dropping for a fourth day. The world’s biggest provider of kidney dialysis reported third-quarter net income of $270 million, missing the average analyst projection of $285 million. Quarterly sales climbed to $3.4 billion. Analysts had predicted revenue of $3.5 billion.

Continental AG slid 2.8 percent to 77.33 euros. Europe’s second-largest maker of car parts said its markets would become harder in the fourth quarter.

“It is clear that the road is becoming rockier and we must keep our eye on the development of the markets,” Continental’s Chief Executive Officer, Elmar Degenhart, said a statement.

Infineon Technologies AG declined 2.9 percent to 5.25 euros, snapping a three-day rally.

Lufthansa surged 7.3 percent to 11.79 euros, its biggest gain in three years, after Europe’s largest airline by sales said quarterly profit rose 6.2 percent as a cost-savings program helped increase earnings.

Operating profit advanced to 648 million euros ($840 million) from 610 million euros a year earlier, Cologne, Germany-based Lufthansa said today. Analysts had predicted earnings of 522 million euros, based on nine estimates. Revenue rose 6.1 percent to 8.31 billion euros.

Software AG advanced 1.3 percent to 30.91 euros. Germany’s second-biggest maker of business software was raised to equal weight from underweight at Barclays, meaning that investors should not sell more of the shares.

To contact the reporter on this story: Tom Stoukas in Athens at astoukas@bloomberg.net

To contact the editor responsible for this story: Andrew Rummer at arummer@bloomberg.net

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