German stocks advanced for a second day, paring their third week of losses, as Daimler AG and ThyssenKrupp AG advanced, while investors weighed a weaker-than-forecast U.S. jobs report.
Daimler rose 1.7 percent as Chief Executive Officer Dieter Zetsche said the automaker will increase the price of some models. ThyssenKrupp climbed 2.5 percent as peer ArcelorMittal, the world’s biggest steelmaker, forecast profit will grow 16 percent this year. Hugo Boss AG fell 1.9 percent after the luxury-clothing maker posted fourth-quarter revenue that missed analysts’ estimates.
The DAX Index climbed 0.5 percent to 9,301.92 at the close of trading in Frankfurt, paring its weekly loss to 0.1 percent. The index has slipped 4.5 percent from its record on Jan. 17 amid a sell-off in emerging-market currencies and signs of slowing economic growth in China. The broader HDAX Index also gained 0.5 percent today.
“I’d much rather see good news being good news and bad news being bad news, but that can easily be turned on its head,” Michael Ingram, a market strategist at BGC Partners LP in London, said by telephone. “If the Federal Reserve is truly data dependent, then they’ll have to rein in on tapering. They have to react to this data. If there’s another month of bad data, that’d be a slam dunk in terms of putting a pause on tapering.”
U.S. payrolls increased by 113,000 in January, following a revised 75,000 gain the prior month, Labor Department figures showed today in Washington. The median forecast of economists in a Bloomberg survey called for a 180,000 advance. The jobless rate unexpectedly fell to 6.6 percent, the lowest level since October 2008 even as more Americans entered the labor force.
The DAX extended gains today after the worse-than-expected jobs report. The Fed has been scrutinizing employment data to determine the timing and pace of cuts to stimulus. The central bank last week said it will press on with a second reduction to its monthly bond buying, by $10 billion to $65 billion, citing an improvement in the labor market.
“Some people thought the problems that drove the market selloff were compartmentalized to emerging markets, but there’s really a broader worry about growth,” Ingram said. “At the very least, the U.S. is going through a soft patch.”
Shares had pared gains earlier after Germany’s top court announced that it has asked the European Union’s highest tribunal to rule on the legality of the ECB’s as-yet-unused asset-purchase program. The Frankfurt-based central bank announced the details of its bond-buying plan in September 2012 amid investor concern that the euro area would break apart and after President Mario Draghi pledged to do whatever it takes to save the currency.
Daimler added 1.7 percent to 63.54 euros, for a third day of gains. Zetsche said the auto manufacturer will lower sales incentives on Mercedes-Benz cars and raise prices on some models as demand outstrips supply. The CEO told analysts today that he expects pricing to improve significantly this year.
The world’s third-largest maker of luxury vehicles posted its biggest two-day gain since July after yesterday forecasting that its 2014 operating profit from ongoing operations will exceed the 7.9 billion euros ($10.7 billion) achieved last year.
ThyssenKrupp advanced 2.5 percent to 19.25 euros, its highest price since Nov. 29. ArcelorMittal said earnings before interest, taxes, depreciation and amortization will rise to about $8 billion this year from $6.9 billion in 2013 as steel and iron-ore production increase to meet a rebound in European and U.S. demand. It also said fourth-quarter profit jumped 23 percent.
Sky Deutschland AG climbed 1.1 percent to 7.69 euros. Bankhaus Metzler raised its rating on the pay-TV operator to buy from sell, saying it should add subscribers and increase the average revenue per user in 2014. The Munich-based company yesterday posted higher-than-forecast Ebitda.
Hugo Boss fell 1.9 percent to 92.82 euros. The retailer posted fourth-quarter revenue of 649 million euros, missing the 664 million euros estimated by analysts.