German stocks dropped to a six-week low as the nation’s exports fell and Federal Reserve Bank of St. Louis President James Bullard signaled the U.S. central bank may reduce bond purchases.
Volkswagen AG slid to the lowest level since November as sales declined. K+S AG retreated for an eighth day after Berenberg Bank downgraded the potash producer. Deutsche Bank AG increased 3.1 percent as financial shares in the regional Stoxx Europe 600 Index advanced.
The DAX Index slipped 0.3 percent to 7,637.51 at the close of trading in Frankfurt, having earlier advanced as much as 0.8 percent, as Alcoa Inc. began the U.S. earnings season. The benchmark gauge has still climbed 13 percent in the past year as U.S. data pointed to a recovery in the world’s biggest economy and central banks maintained so-called quantitative easing. The broader HDAX Index also declined 0.3 percent today.
“Stock markets are dragging down amid the beginning of the earnings season,” said Andreas Lipkow, a senior market strategist at Kliegel & Hafner AG in Berlin. “Statements from St. Louis Fed President James Bullard about a possible reduction of the QE program are one reason and uncertainties about the ongoing U.S. earnings season is the other.”
The volume of shares changing hands in companies listed on the DAX was 19 percent lower than the average of the last 30 days, according to data compiled by Bloomberg.
Bullard, one of the first Fed officials to urge slowing the pace of bond buying in 2013 if economic conditions allowed, told CNBC today in an interview that policy makers probably will “slowly ratchet down the pace of purchases” as the economy continues to improve.
Alcoa, the largest U.S. aluminum producer, late yesterday posted first-quarter profit excluding an income-tax benefit and other one-time items of 11 cents a share, beating the 8-cent average analyst forecast, as demand from airplane and car manufacturers increased. Earnings at companies in the Standard & Poor’s 500 Index will drop 1.8 percent in the first quarter, according to estimates compiled by Bloomberg.
German exports fell more than economists forecast in February as the euro area, the country’s biggest trading partner, struggled to emerge from recession. Exports, adjusted for working days and seasonal changes, dropped 1.5 percent from January, the Federal Statistics Office said. Economists had forecast a 0.3 percent decline, according to the median of 15 estimates in a Bloomberg survey. Imports dropped 3.8 percent.
Volkswagen fell 2.6 percent to 152 euros, the lowest price since Nov. 16. Europe’s largest automaker said markets are becoming “more challenging” after posting a sales decline at its namesake brand last month.
The VW marque’s first-quarter deliveries in Europe dropped 10 percent. Sales in Germany, the region’s largest market, plummeted 15 percent.
K+S, Europe’s largest potash maker, fell 1.2 percent to 34.51 euros. The stock was downgraded to sell from buy at Berenberg, which said it prefers producers of seeds and crop protection in the agrochemical sector over fertilizer makers.
Adidas AG, the world’s second-largest sporting goods maker, dropped 2.1 percent to 77.05 euros for a fifth straight day of losses.
Infineon Technologies AG slid 2.4 percent to 5.87 euros, its lowest price since Dec. 14.
Deutsche Bank, Germany’s largest lender, rose 3.1 percent to 31.12 euros, snapping four days of losses. Commerzbank AG, the second-biggest, gained 2.2 percent to 1.16 euros.
Aurubis AG gained 6 percent to 48.35 euros, the biggest jump in eight months. The world’s second-largest producer of refined copper said U.S. orders for the metal are rebounding as European demand improves.