German Stocks Are Little Changed as U.S. Jobs Data Misses
German stocks were little changed as U.S. reports showed that housing starts fell more than economists had forecast and jobless claims rose.
Suedzucker AG (SZU) tumbled 6.7 percent after forecasting that operating profit will decline in 2014. Kabel Deutschland Holding AG lost 3.1 percent after Deutsche Telekom AG agreed to allow Vodafone Group Plc to sell broadband and television over its fixed-line network. HeidelbergCement AG (HEI) gained 1.8 percent after Natixis upgraded the shares.
The DAX Index rose 0.1 percent to 8,369.87 at the close of trading in Frankfurt, after climbing as much as 0.5 percent and dropping as much as 0.5 percent. The gauge has gained for eight days and has rallied 10 percent this year as central banks around the world maintained monetary stimulus. The broader HDAX Index also rose 0.1 percent today.
“Equities have been floating blissfully higher as momentum has driven returns in the face of economic-growth disappointment,” Daniel Weston, a portfolio manager at Aimed Capital Management in Munich wrote in a message. “Buying the dip has been the winning strategy this year and investors are mindful it may have longer to run. Weak jobless claims data signals brighter green lights for the the continued stimulus experiment and potential supporting of asset prices.”
The volume of shares changing hands in companies listed on the DAX was 3.5 percent greater than the average of the last 30 days, according to data compiled by Bloomberg.
In the U.S., a Commerce Department report showed that housing starts dropped to 853,000 in April. That fell short of the 970,000 average of economist estimates compiled by Bloomberg. Builders began work on a revised 1.02 million properties in March.
A Labor Department release revealed that initial jobless claims rose by 32,000 to 360,000 in the week ended May 11. The median estimate of economists surveyed by Bloomberg had called for claims of 330,000.
Suedzucker slumped 6.7 percent to 27.34 euros. Europe’s biggest sugar producer forecast that full-year operating profit will drop to 825 million euros ($1.06 billion) in 2014 from 974 million euros in 2013. The company also reported full-year revenue of 7.9 billion euros, beating the average analyst estimate of 7.82 billion euros.
Kabel Deutschland, Germany’s biggest cable company, slid 3.1 percent to 73.14 euros. Deutsche Telekom’s network will enable Vodafone to offer broadband speeds of 50 megabits per second and provide on-demand video to German customers. The maximum speed on the network will eventually increase to 100Mbps. Deutsche Telekom gained 2.7 percent to 10.04 euros.
Infineon Technologies AG (IFX) fell 1.6 percent to 6.43 euros after UBS downgraded Europe’s second-biggest chipmaker. UBS said the catalyst of first-quarter results has passed.
HeidelbergCement gained 1.8 percent to 60.54 euros. Natixis raised the world’s third-largest cement maker to neutral from reduce. The brokerage cited higher prices in the U.S. and improving margins in Indonesia.
Celesio AG (CLS1) jumped 6.3 percent to 16.55 euros. Bank of America Corp.’s Merrill Lynch unit raised the drug wholesaler to buy from underperform. The brokerage cited the potential for increased cash returns.
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