German Stocks Drop as U.S. Factory Orders Trail Forecasts
German stocks declined for the first time in three days as reports showed U.S. factory orders climbed less than forecast and Spain’s public debt will rise to a record this year.
Phoenix Solar AG (PS4) tumbled to its lowest price since 2004 after saying that legislation cutting solar subsidies forced it to postpone its results and refinancing talks. Q-Cells SE (QCE) rose 7.9 percent after the state of Saxony-Anhalt said it may help the company to restructure.
The DAX (DAX) Index fell 74.37, or 1.1 percent, to 6,982.28 at the close in Frankfurt as General Motors Co. and Ford Motor Co. reported U.S. vehicle sales that trailed projections. The gauge has still rallied 18 percent this year amid optimism that the euro area’s leaders would contain the region’s sovereign-debt crisis and as U.S. economic releases exceeded estimates. The broader HDAX Index retreated 0.9 percent today.
“Markets are tending slightly lower, which is not merely due to a moderate miss in factory orders but rather due to far rather disappointing car sales,” said Markus Huber, head of German sales trading at ETX Capital in London.“Ford posted a slight miss while General Motors posted rather disappointing figures, missing estimates by a wider margin.”
German stocks have posted their best start to a year compared with U.S. equities since 2006. The DAXK Index (DAXK), a German equities gauge that strips out gains from dividends, has surged 19 percent in 2012 after sinking to the cheapest valuation in at least six years last year. That’s the largest advance since 1998 and 6.3 percentage points more than the Standard & Poor’s 500 Index’s increase, data compiled by Bloomberg show.
The volume of shares trading hands on the DAX was 23 percent lower than the 30-day average today, according to data compiled by Bloomberg.
Orders to U.S. factories rose 1.3 percent after a revised 1.1 percent decline in January, figures from the Commerce Department showed today in Washington. The median of 60 economists’ projections in a Bloomberg News survey had called for a 1.5 percent advance.
GM sales rose 12 percent to 231,052, while Ford deliveries advanced 5 percent to 222,884 cars and light trucks. The average of 10 estimates was for a 19 percent gain at GM and 5.5 percent at Ford. Chrysler, controlled by Fiat SpA, said its U.S. sales climbed 34 percent to 163,381 and Nissan’s sales sales rose 5 percent to 136,317, exceeding predictions.
Spanish Debt, Unemployment
Spain’s debt will reach 79.8 percent of gross domestic product this year, up from 68.5 percent last year, the government said in its budget today. The yield on Spain’s 10- year bonds climbed 10 basis points to 5.45 percent.
Registered unemployment in Spain, where more than half of young people are out of work, rose for the eighth month in March as the government deepened spending cuts and the economy slipped back into a recession. The number of people registering for jobless benefits increased by 38,769 to 4.75 million, the Labor Ministry in Madrid said today.
Phoenix plunged 30 percent to 91.9 euro cents, dropping for a seventh day. The builder of solar-power plants said it will postpone its 2011 results “most likely for a few weeks.” Phoenix added that financing talks were delayed because of Germany’s cuts to feed-in tariffs for solar power.
Solar Millennium AG (S2M) tumbled 15 percent to 10.8 euro cents after rallying 25 percent yesterday. Utz Claassen, the company’s former chief executive officer, is suing the German company, its U.S. subsidiary and Solar Trust of America LLC for $265 million in damages, Solar Millennium said.
Claassen alleges that Solar Millennium company officers harmed his professional reputation with statements they made after he left the company in March 2010, according to a statement that didn’t identify the company officials.
Solarworld AG (SWV), Germany’s biggest maker of solar panels, dropped 8.4 percent to 2.24 euros. Wacker Chemie AG (WCH), the second- largest maker of solar-grade silicon, fell 3 percent to 62.76 euros.
Bayer Motoren Werke AG, the biggest maker of luxury cars, fell 1.8 percent to 67.99 euros.
K+S AG, Europe’s largest potash maker, fell 1.4 percent to 39.42 euros. The stock was downgraded to reduce from neutral at Nomura Holdings Inc.
Hochtief AG, Germany’s largest construction company, slid 1.6 percent to 45.83 euros as construction shares declined.
Q-Cells (QCE) surged 7.9 percent to 13.6 euro cents after the stock tumbled 41 percent yesterday. The German solar-cell maker filed for insolvency with the Dessau-Rosslau court today, said Frank Straube, a spokesman for the state court of Saxony-Anhalt.
The government of Saxony-Anhalt may help Q-Cells to restructure, Mitteldeutsche Zeitung reported, citing an interview with Jens Bullerjahn, the state’s finance minister. Prime Minister Reiner Haseloff had previously ruled out any assistance, according to the newspaper.
Grenkeleasing AG (GLJ), which buys and leases computer equipment, soared 7.6 percent to 48.50 euros. The company said new business in the first quarter rose 25 percent to 238.3 million euros ($318 million).
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