German Stocks Retreat; Merck KGaA, Siemens, MAN SE Decline
German stocks retreated, with the benchmark DAX Index paring last week’s advance, as Merck KGaA and Siemens AG declined.
Merck fell 1.4 percent as Morgan Stanley said it expects the drugmaker’s multiple sclerosis drug to face growth troubles. Siemens lost 1.8 percent. MAN SE slipped as the truckmaker was downgraded at Equinet AG. Beiersdorf AG gained 1 percent.
The benchmark DAX Index lost 0.3 percent to 6,278.89 at the 5:30 p.m. close in Frankfurt, having risen 5.3 percent so far this quarter. The measure has rallied 16 percent from its low this year on Feb. 5 as investors speculated that Europe’s sovereign-debt crisis won’t choke off the recovery. The broader HDAX Index also slipped 0.3 percent today.
New York University Professor Nouriel Roubini said there’s a high probability of another U.S. recession. He also said that Japan’s economic outlook is “anemic.”
China may face greater headwinds if the U.S. and European economies weaken, Roubini said in Kuala Lumpur today, where he is attending a conference. The U.S. will probably revise down its second-quarter gross domestic product figures after “awful” June real-estate numbers, Roubini added.
Merck, Siemens Fall
Merck fell 1.4 percent to 62.10 euros. The drugmaker extended a 10 percent drop on Sept. 24 after the European Medicines Agency rejected Merck’s application to approve its Cladribine multiple-sclerosis pill, saying the benefits failed to outweigh the risks.
“We believe the company’s two-year double-digit growth target in its MS franchise will almost certainly not be achieved,” Morgan Stanley analyst Andrew Baum wrote in a note to clients today. “We see downside to both consensus sales and earnings.”
Siemens, Europe’s biggest engineering company, declined 1.8 percent to 77.84 euros. Profit at the health-care unit will probably be “slightly less” than the 483 million euros ($650.79 million) reported a year ago, Siemens said. That outlook excludes the 1.4 billion-euro impairment charge that Siemens said it would take at its diagnostics health-care division because of lower growth rates at the unit.
MAN dropped 1.2 percent to 79.93 euros, paring the shares’ 6.2 percent jump on Sept. 24. Europe’s third-largest truckmaker was cut to “accumulate” from “buy” at Equinet.
Beiersdorf, the maker of Nivea handcream, gained 1 percent to 42.92 euros. UBS AG said it expects further mergers and acquisitions between global staples companies, following Unilever’s decision to buy Alberto Culver Co.
Wirecard AG jumped 2.8 percent to 9.97 euros as the maker of electronic payment and risk management software was rated “overweight” in new coverage at Barclays Capital.
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