German stocks dropped for the first time in six days as lower-than-forecast U.S. jobless claims fueled speculation the Federal Reserve will taper its bond-buying program as early as September.
RWE AG tumbled to a 10-year low as Exane BNP Paribas cut its earnings estimates for the utility. Henkel AG lost 1.2 percent after Chief Executive Officer Kasper Rorsted forecast no short-term catalyst for improvement in Europe’s economy.
The DAX Index slid 0.7 percent to 8,376.29 at the close of trading in Frankfurt. The benchmark gauge has still rallied 8.9 percent from its low on June 24 as the European Central Bank said interest rates will remain low for an extended period of time, while gauges of manufacturing and gross domestic product in the euro area beat forecasts. The broader HDAX Index fell 0.8 percent today.
“It’s been buy on the rumours, sell on the news; now the news is here, the economy is doing better than expected and people are taking profits,” James Butterfill, who helps manage about $44 billion as head of global equity strategy at Coutts & Co. in London, said in a phone interview. “The most recent set of data is swinging the balance of probabilities in favour of tapering in September. The question is then how much tapering will occur.”
In the U.S., claims for jobless benefits unexpectedly dropped last week to the lowest level in almost six years. The number of applications for unemployment insurance payments declined by 15,000 to 320,000 in the week ended Aug. 10, the fewest since October 2007, from a revised 335,000, a Labor Department report showed today. The median forecast of 44 economists surveyed by Bloomberg called for 335,000.
Separate data from the Federal Reserve showed that industrial production in the world’s largest economy was unchanged in July as a slowdown at factories overshadowed an increase in mining, missing economists’ forecasts for 0.3 percent growth.
The volume of shares changing hands in DAX-listed companies was 19 percent lower than the average of the past 30 days, according to data compiled by Bloomberg.
RWE fell 2.9 percent to 20.74 euros, its lowest price since March 2003. Exane cut its 2014 profit estimate for Germany’s second-largest utility by 3 percent and by 12 percent for 2015. Analyst Christophe Wakim separately wrote that RWE risks being removed from the Euro Stoxx 50 Index after a 33 percent drop in its shares this year.
K+S AG declined 0.4 percent to 18.24 euros, paring earlier losses of as much as 3 percent. Trading in potash from India has ground to a halt as buyers have already taken the contracted quantities and others seek price cuts, Fertilizer Week reported, without saying where it got the information.
Henkel, which makes products from Right Guard deodorant to Loctite adhesives, slid 1.2 percent to 76.94 euros. “The only economy that gives us worries is the European economy,” Rorsted said yesterday in an interview at Bloomberg headquarters in New York. About one-third of the Dusseldorf, Germany-based company’s second-quarter sales came from western Europe.
Nordex SE jumped 17 percent to 8.83 euros, its highest price since March 2011. The maker of wind turbines reported first-half sales and pre-tax earnings that beat analysts’ estimates, and raised its forecasts for full-year sales and profit margins.
Gagfah SA, the second-biggest owner of German homes, rose 1.6 percent to 9.75 euros. Property prices in Europe’s biggest economy rose by the most in a year in the second quarter, according to an index published by the VDP Association of German Pfandbrief Banks today.