German stocks climbed for a third day, with the benchmark DAX Index heading for its fourth consecutive quarterly advance, as sales of previously-owned homes in the U.S. increased more than forecast and consumer spending in the world’s biggest economy rebounded in May.
MorphoSys AG surged 17 percent after announcing an alliance for an experimental cancer treatment with Celgene Corp. worth as much as 628 million euros ($819 million) plus royalties on sales. Adidas AG added 3.3 percent as Barclays Plc recommended the shares. Lanxess AG fell to its lowest price in 17 months after China said it will collect anti-dumping duty on toluidine imports from the European Union for five years.
The DAX added 0.6 percent to 7,990.75 at the close in Frankfurt. The gauge has still slipped 4.3 percent this month, its biggest decline in 13 months, as investors prepared for a potential paring of stimulus by the Federal Reserve if the U.S. economy improves in line with forecasts. The HDAX Index gained 0.7 percent today.
“The takeaway from the data is an economy that continues to experience uneven results,” Adrian K. Miller, a New York-based global markets strategist at GMP Securities LLC, said. “This week’s data speaks to an economy heeling at a modest rate that does not make the case for the Fed to aggressively step up its tapering process with Q4 remaining the most likely start.”
The German VDAX Index, which measures the cost of buying protection against swings on the DAX, has increased 13 percent so far in June. It’s heading for the first back-to-back monthly advance in 13 months.
More Americans signed contracts in May to buy previously-owned homes than at any time in more than six years. The index of pending home sales jumped 6.7 percent to 112.3, the highest since December 2006, figures from the National Association of Realtors showed today in Washington. The increase exceeded all estimates in a Bloomberg survey of economists and was the biggest since April 2010.
Consumer spending in the U.S. rebounded in May following the largest drop in more than three years. Household purchases, which account for about 70 percent of the economy, rose 0.3 percent after a 0.3 percent drop the prior month that was the biggest since September 2009, Commerce Department figures showed today. Incomes advanced 0.5 percent, more than projected.
In the EU, finance ministers struck an agreement early this morning on how to handle failing banks to bolster investor confidence and help overcome the euro area’s financial crisis.
Ministers settled on guidelines for assigning losses to private creditors and regulating public assistance. They also spelled out when governments can step in and established a role for the European Stability Mechanism, the euro area’s 500 billion-euro firewall fund.
MorphoSys surged 17 percent to 43.46 euros, the highest price in more than 12 years. Celgene will co-develop and co-promote MorphoSys’s MOR202 drug for diseases including multiple myeloma, a type of blood cancer. MorphoSys will adjust its financial guidance after it receives U.S. antitrust clearance for the deal, spokeswoman Claudia Gutjahr-Loeser said.
Adidas added 3.3 percent to 83.83 euros as Barclays raised its rating on the stock to overweight, similar to a buy recommendation, from equal weight, saying improving gross margins will drive earnings this year.
Fresenius Medical Care AG increased 1.5 percent to 54.50 euros, the highest price since April 15. Commerzbank AG upgraded the biggest provider of kidney dialysis to add from hold, citing waning concerns about regulation in the U.S. as the pressure on Medicare reimbursement eases.
Lanxess fell 3.3 percent to 46.61 euros. The chemical manufacturer will pay an anti-dumping duty of 19.6 percent in China, while all other EU companies will pay duty of 36.9 percent on their products, according to a statement from the Chinese Ministry of Commerce.
BASF SE, the world’s biggest chemical maker, slipped 2 percent to 68.33 euros.
Deutsche Bank AG and Commerzbank, Germany’s biggest lenders, declined 1.6 percent to 33.14 euros, and 4.4 percent to 6.60 euros, respectively, as a gauge of European banking shares was the worst performer of the 19 industry groups on the Stoxx Europe 600 Index.