German Stocks Drop as U.S. House Starts Miss ForecastsJonathan Morgan
German stocks declined from their highest level in two weeks as Deutsche Lufthansa AG slid and housing starts in the U.S. fell in January more than forecast.
Lufthansa slumped the most in more than 15 months after saying it will suspend its dividend for the first time since 2010. BASF SE and Bayer AG gained the most on the benchmark DAX Index. HeidelbergCement AG rose to a 21-month high as peer Lafarge SA reported earnings that beat analysts’ estimates.
The DAX Index slipped 0.3 percent to 7,728.9 at the close of trading in Frankfurt. The benchmark gauge has still advanced 1.5 percent so far this year as U.S. lawmakers agreed on a budget avoiding automatic fiscal changes that had threatened to push the world’s biggest economy into recession. The broader HDAX Index fell 0.2 percent today.
“The U.S. housing starts data is unwelcome bad news,” Chris Beauchamp, a market analyst at IG in London, said in a telephone interview. “We thought housing was picking up in the U.S. after a long time absent.”
Total housing starts in the U.S. dropped to an 890,000 rate in January, less than forecast and restrained by a slump in construction of multifamily units, according to Commerce Department figures released today in Washington. Permits for future construction rose.
The median estimate of 85 economists surveyed by Bloomberg projected total housing starts would drop to a 920,000 annual rate.
Lufthansa retreated 6.2 percent to 15 euros. Europe’s second-biggest airline will suspend its dividend to preserve cash as it rejuvenates its fleet and implements a cost-savings program.
Lufthansa said net income last year reached 990 million euros ($1.33 billion), compared with a year-earlier loss of 13 million euros, as it benefited from disposal gains. Revenue in 2012 rose to 30.1 billion euros from 28.7 billion euros, Lufthansa said, citing preliminary figures.
EON SE and RWE AG, Germany’s two biggest utilities, dropped 2.2 percent to 12.88 euros and 1.8 percent to 27.84 euros, respectively.
Bayer, the drugs and chemicals maker, gained 1.2 percent to 72.63 euros. BASF, the world’s biggest chemical manufacturer, added 0.5 percent to 74.12 euros, paring gains of as much as 1.4 percent.
HeidelbergCement, the world’s third-largest cement maker, rose 1.8 percent to 51.26 euros, its highest since May 2011. Lafarge, the biggest cement maker, said fourth-quarter earnings beat estimates on rising sales in Asia and Latin America.
Adidas AG, the world’s second-biggest sporting-goods maker, climbed 0.7 percent to 72.10 euros, a record high. Deutsche Bank AG raised its forecast price on the shares to 81 euros from 70 euros, predicting a significant increase in earnings from the second quarter of 2013.