German Stocks Climb as U.S. Housing, Jobless Data Beat

German stocks climbed for a second day as U.S. housing starts rose more than forecast in December, while initial jobless claims in the world’s biggest economy fell to the lowest level in five years.

HeidelbergCement AG rose 3.2 percent, for the largest gain on the benchmark DAX Index. ThyssenKrupp AG added 2.2 percent. SAP AG retreated 1.5 percent as Citigroup Inc. downgraded its recommendation on the shares.

The DAX rose 0.6 percent to 7,735.46 at the close of trading in Frankfurt. The measure has gained 1.6 percent so far this year as U.S. lawmakers agreed on a compromise budget to prevent most scheduled tax increases and delay spending cuts. The broader HDAX Index added 0.7 percent today.

“These are great numbers in U.S. housing,” Ion Marc Valahu, co-founder and fund manager at Clairinvest in Geneva, wrote in a message. “Dips are being bought as the market consolidates. In addition, the euro is way above the 1.20 floor which tells me that risk aversion is reversing as investors have more confidence in the euro zone.”

The euro advanced toward a 10-month high against the dollar as Spain’s borrowing costs fell at a 4.5 billion-euro ($6 billion) sale of bonds, underscoring demand for the region’s higher-yielding assets.

The volume of shares changing hands on the DAX was 3 percent lower than the average of the last 30 days, data compiled by Bloomberg show.

U.S. Housing

In the U.S., builders broke ground on more houses than forecast in December, capping the best year for the industry since 2008.

Starts climbed 12.1 percent last month to a 954,000 annual rate, exceeding all forecasts in a Bloomberg survey of economists and the most since June 2008, the Commerce Department reported today in Washington. For all of last year, construction began on 780,000 homes, up from 608,800 in 2011 and also the most since 2008.

The number of Americans filing first-time claims for unemployment insurance payments fell more than forecast last week. Applications for jobless benefits decreased by 37,000 to 335,000 in the week ended Jan. 12, the lowest level since the period ended Jan. 19, 2008, Labor Department figures showed today. Economists forecast 369,000 claims, according to the median estimate in a Bloomberg survey.

The U.S. economy picked up across much of the country last month, boosted by auto and home sales, even as the outlook for unemployment showed few signs of improvement, the Federal Reserve said late yesterday in its Beige Book business survey.

HeidelbergCement Gains

HeidelbergCement, the world’s third-largest maker of the building material, gained 3.2 percent to 47.23 euros.

ThyssenKrupp, Germany’s biggest steelmaker, added 2.2 percent to 18.40 euros. Salzgitter AG, the second-largest, rose 1.2 percent to 36.74 euros.

BASF SE advanced 1.2 percent to 73.20 euros. The world’s biggest chemical maker got closer to pushing through its $900 million takeover of Norwegian drug-ingredient maker Pronova BioPharma ASA as an improved offer won over two investors who had initially rejected the deal.

Odin Forvaltning AS, which owns 4.7 percent of Pronova, will tender its shares, even though the price isn’t as much as it had wanted, fund manager Alexandra Morris said today. Her comments echo those of Rolf Solgard, chief portfolio manager at Nykredit Asset Management, which owns about 1 percent.

Infineon Technologies AG, Europe’s second-biggest semiconductor manufacturer, climbed 2 percent to 6.72 euros.

BayWa AG advanced for an eight day, gaining 3.4 percent to 36.55 euros. Bankhaus Lampe raised its price estimate on the distributor of farm products and building materials to 41 euros a share from 40 euros on higher 2013 earnings expectations after a real estate sale was partly moved from 2012 to this year.

SAP fell 1.5 percent to 58.13 euros. Citigroup downgraded the shares to neutral from buy, saying that the mixed global IT spending environment is starting to affect the largest maker of enterprise software and it may not be able to match the level of deals made last year.

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