German Stocks Decline Before Durable Goods, Homes Data
German stocks fell before reports on U.S. durable-goods orders and new home sales, and as Treasury Secretary Jacob J. Lew warned that investors may be too optimistic on the prospects for a deal to raise the debt limit.
Linde AG (LIN) fell 0.7 percent, as a gauge of chemical stocks dropped. K+S AG (SDF) slipped 3.5 percent, for the biggest decline on the benchmark index. Wacker Chemie AG (WCH) rose 1.9 percent after UBS AG added the stock to its most preferred list. ThyssenKrupp AG (TKA) gained 5.1 percent as Cevian Capital AB bought a 5.2 percent stake in Germany’s biggest steelmaker.
The DAX Index (DAX) slipped 0.3 percent to 8,636.56 at 9:47 a.m. in Frankfurt. Shares have fluctuated as investors consider the composition of a new government after Angela Merkel’s election victory. The gauge has climbed 8.5 percent this quarter and is heading for a 13 percent annual gain. It rose last week after the Federal Reserve refrained from reducing its $85 billion of monthly asset purchases. The HDAX Index fell 0.3 percent today.
“The risk-on rally has begun to fade as equity markets are in a wait-and-see mode,” Christoph Hock, an equity sales trader at Alpha Wertpapierhandels GmbH in Frankfurt, wrote in an e-mail. “Confusion about the Fed’s lack of decision to taper and the deadlines on approving a resolution to keep the government funded and to raise the debt ceiling are weighing on markets.”
A Commerce Department report at 8:30 a.m. Washington time may show that durable goods, excluding the volatile transportation category, rose 1 percent in August after falling 0.8 percent the previous month, according to the median forecast of 60 economists in a Bloomberg News survey.
Separate data from the Commerce Department will show that purchases of new houses climbed to a 420,000 annual rate last month after plunging in July by the most in three years, economists projected.
Lew, who spoke at the Bloomberg Markets 50 Summit in New York yesterday, said investor confidence that a deal can be struck to raise the debt limit is “a bit greater than it should be.” He repeated that President Barack Obama won’t negotiate with congressional Republicans on increasing the $16.7 trillion ceiling on the nation’s borrowing authority.
A gauge of German consumer confidence will rise to 7.1 in October from a revised 7 in September, Nuremberg-based research company GfK AG said today. That would be the highest since September 2007. Analysts had expected a reading of 7, according to the median estimate in a Bloomberg News survey.
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