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German Stocks Climb Third Day as Confidence Increases

Dec. 20 (Bloomberg) -- German stocks rose for a third day, with the DAX Index posting its biggest weekly gain since July, as consumer confidence increased and a report showed the U.S. economy expanded in the third quarter more than forecast.

Adidas AG, the world’s second-biggest maker of sporting goods, added 1.2 percent as peer Nike Inc. posted better-than-forecast second-quarter profit. Deutsche Bank AG gained 1.4 percent after settling claims related to mortgage-backed securities sold to Fannie Mae and Freddie Mac.

The DAX rose 0.7 percent to 9,400.18 at the close of trading in Frankfurt. The benchmark rallied 4.4 percent this week, trimming its monthly loss to 0.1 percent, after the Federal Reserve’s decision to slow the pace of its bond-buying program boosted confidence in the U.S. economic recovery. The broader HDAX Index increased 0.6 percent today.

“The recovery has been taking hold, taking momentum for some time,” Oliver Wallin, who helps oversee $5.6 billion as investment director at Octopus Investments Ltd. in London, said by telephone. “The sting has been taken out of the tail. We’ve got a plan of how this is going to work and markets can factor that in,” he said, referring to the Fed’s taper.

The volume of shares changing hands in DAX-listed companies was 68 percent greater than the average of the last 30 days, according to data compiled by Bloomberg.

A gauge of consumer confidence in Germany will climb to 7.6 in January from 7.4 this month, Nuremberg-based research company GfK SE said today. That would be the highest since August 2007. Analysts had expected a reading of 7.4, according to the median estimate in a Bloomberg survey.

U.S. Economy

A Commerce Department report in Washington showed the U.S. economy expanded in the third quarter at a faster rate than previously estimated. Gross domestic product climbed at a 4.1 percent annualized rate. The median forecast of 72 economists surveyed by Bloomberg projected a 3.6 percent pace.

Adidas rose 1.2 percent to 89.99 euros. Nike, the largest maker of sporting goods, said net income in the three months through November rose 40 percent to $537 million, or 59 cents a share, beating the average analyst estimate for 58 cents.

Deutsche Bank advanced 1.4 percent to 34 euros. Germany’s biggest lender said it will pay 1.4 billion euros ($1.9 billion) to settle claims it didn’t provide adequate disclosure about mortgage-backed securities sold to Fannie Mae and Freddie Mac.

The agreement with the Federal Housing Finance Agency covering the period 2005 to 2007 resolves Deutsche Bank’s largest mortgage-related litigation case, the Frankfurt-based lender said in a statement on its website today.

Deutsche Boerse

Deutsche Boerse AG, operator of the Frankfurt Stock Exchange, increased 3.2 percent to 58.92 euros. A gauge of financial-services companies posted the biggest gain of the 19 industry groups on the Stoxx Europe 600 Index.

Jenoptik AG rose 2.2 percent to 12.10 euros, after earlier rallying as much as 4.3 percent. The supplier of optical systems was rated new buy at Kepler Cheuvreux, with a price estimate of 15 euros, or 27 percent above yesterday’s closing price.

Hornbach Holding AG added 1.8 percent to 59.25 euros. The garden-supplies retailer reported third-quarter net income of 16.3 million euros, up from 6.6 million euros a year earlier and making up for the weather-related shortfall in first-quarter earnings.

Software AG slumped 6.6 percent to 24.67 euros, its biggest drop in almost five months. U.S. peer Tibco Software Inc., which makes programs for running data centers, forecast first-quarter earnings of no more than 18 cents a share, falling short of the average analyst estimate by 3 cents.

GfK lost 3.2 percent to 40 euros, its lowest price in four months, after cutting the value of goodwill on acquisitions related to the consumer sector in North and Latin America, as well as southern and western Europe, by 112.5 million euros. The market-research provider said this would have a “significant” effect on its consolidated total income.

To contact the reporter on this story: Inyoung Hwang in London at ihwang7@bloomberg.net

To contact the editor responsible for this story: Cecile Vannucci at cvannucci1@bloomberg.net

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