German DAX Falls to Lowest Since February 2010 as Carmakers Drop
German stocks retreated, with the benchmark DAX Index (DAX) falling to its lowest level since February 2010, amid concern the economic recovery is stalling.
The DAX Index slumped 2.2 percent to 5,480 at the 5:30 p.m. close in Frankfurt, extending its biggest decline since 2008 and posting a weekly drop of 8.6 percent. The gauge has tumbled 27 percent from this year’s peak on May 2 amid concern that Europe will fail to contain its sovereign-debt crisis and that the economic recovery in the U.S. will falter. The broader HDAX Index lost 2 percent today.
The DAX pared an earlier loss of as much as 4.6 percent as the European Commission said it may present draft legislation on joint bond sales by euro-area nations when completing a report on the feasibility of common debt sales, putting pressure on Germany to drop its opposition.
The U.S. economy may expand less than previously forecast in 2011 and 2012 because of potential “political paralysis” and fiscal-tightening measures, according to Citigroup Inc.
The brokerage cut its 2011 gross domestic product growth forecast to 1.6 percent from 1.7 percent and lowered its 2012 expansion estimate to 2.1 percent from 2.7 percent, Steven Wieting and Shawn Snyder, analysts at Citigroup, wrote in a report dated yesterday.
JPMorgan Chase & Co. cut its U.S. economic growth estimate for the fourth quarter to 1 percent from 2.5 percent and reduced its forecast for the first quarter of 2012 to 0.5 percent from 1.5 percent.
BMW, Daimler Slip
BMW retreated 3.4 percent to 52.30 euros and Daimler slid 2.6 percent to 34.74 euros. Carmakers posted the biggest decline among 19 industry groups in the benchmark Stoxx Europe 600 Index today, falling 2.9 percent.
ThyssenKrupp and Salzgitter, Germany’s biggest steelmakers, decreased 2.4 percent to 20.95 euros and 2.4 percent to 38.24 euros, respectively.
Solar Millennium AG (S2M) plummeted 57 percent to 3.35 euros, its lowest price on record. The company postponed the financial close for its Blythe solar-power plant project in California as it adjusts to a changed market in the U.S.
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