German Stocks Drop as Bernanke Outlines Stimulus Paring
Allianz SE lost 2.7 percent after catastrophe modeler AIR Worldwide said recent floods could cost insurers as much as 5.8 billion euros ($7.7 billion) in claims from Germany. Talanx AG dropped 3.3 percent as Berenberg Bank downgraded its rating on the shares. Commerzbank AG and Deutsche Bank AG, the country’s biggest lenders, each lost more than 1 percent.
The DAX Index (DAX) slid 2 percent to 8,036.67 at 9:55 a.m. in Frankfurt. The equity benchmark is headed for a third week of losses, which would be the longest streak of weekly declines since April. The gauge is still on track for its fourth consecutive quarterly advance. The broader HDAX Index fell 1.9 percent today.
The volume of shares changing hands in companies listed on the DAX was 45 percent higher than the average of the past 30 days, according to data compiled by Bloomberg.
The Fed will probably reduce the pace of stimulus measures later in 2013 and stop bond purchases around mid-2014 as long as the U.S. economy performs in line with the central bank’s projections, Bernanke told reporters yesterday in Washington after a two-day meeting of the Federal Open Market Committee.
The Fed said it will keep buying bonds at a pace of $85 billion a month, and repeated that it’s prepared to increase or reduce purchases depending on the outlook for the job market and inflation.
In the U.S., sales of existing homes climbed 0.6 percent in May to a 5 million annualized rate, according to the median forecast of economists surveyed by Bloomberg ahead of data from the National Association of Realtors today. A separate report may show jobless claims rose to 340,000 last week from 334,000 the period before, economists said.
Germany’s services industry expanded at the fastest pace in four months in June, while the nation’s manufacturing industry continued to contract.
An index of the services industry based on a survey of purchasing managers rose to 51.3 this month from 49.7 in May, London-based Markit Economics said today. That beat the median estimate of 50 in a Bloomberg News survey of economists.
A manufacturing gauge fell to 48.7 in June from 49.4 in May, Markit said in the same report. Economists had projected a reading of 49.9. A reading above 50 signals expansion.
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