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German Stocks Drop; U.S. Payrolls Rise Less Than Forecast

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April 5 (Bloomberg) -- German stocks declined the most in more than five weeks as a monthly report showed U.S. employers hired fewer workers than forecast in March, and a new outbreak of bird flu in Asia hurt airline shares.

Deutsche Lufthansa AG slumped to its lowest price since December amid concern the outbreak of bird flu in China will lower travel demand. SAP AG, the largest maker of enterprise-management software, fell the most since Jan. 15.

The DAX lost 2 percent to 7,658.75 at the close of trading in Frankfurt, for a weekly loss of 1.8 percent. The benchmark has still advanced 0.6 percent this year amid speculation that central banks will maintain their stimulus measures. The broader HDAX Index retreated 2.1 percent today.

“The move downwards had begun before the disappointing payroll numbers,” Guillermo Hernandez Sampere, head of trading at Fpm Frankfurt Performance Mgmt AG in Frankfurt, who helps manage about 500 million euros ($651 million), wrote in an e-mail. “I see profit taking in quality stocks from macro funds. Some market members see momentum cooling with the weaker macro numbers.”

U.S. payrolls grew by 88,000 workers in March, the smallest in nine months, after a revised 268,000 gain in February that was higher than first estimated, Labor Department figures showed today in Washington. The median forecast of 87 economists surveyed by Bloomberg projected an advance of 190,000.

The jobless rate fell to 7.6 percent from 7.7 percent as the labor force shrank. The labor force participation rate fell to 63.3 percent, the lowest since May 1979.

Airlines Drop

Lufthansa, Europe’s second-largest airline, slid 5.2 percent to 14.14 euros. The death toll from a new strain of bird flu in China, known as H7N9, rose to six people as authorities in Shanghai shut several poultry markets and culled birds.

Air Berlin Plc, Germany’s second-largest airline, slumped 7.8 percent to 2.14 euros.

SAP declined 2.9 percent to 59.92 euros. UBS AG expects licences to fall in the first quarter from a year earlier because of customer caution arising from the bailout of Cyprus and weak economic data.

Lanxess AG slid 3.1 percent to 52.50 euros, its lowest price since July. Morgan Stanley analysts wrote in a note that there is little sign the challenging start to the year is ending and the second quarter could be “tough” for the chemical company.

The volume of shares changing hands in companies on the DAX was 1 percent lower than the average of the last 30 days, data compiled by Bloomberg showed.

To contact the reporter on this story: Jonathan Morgan in Frankfurt at jmorgan157@bloomberg.net

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

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