German Stocks Drop Fifth Day as U.S. Data Miss ForecastsJonathan Morgan
German stocks retreated for a fifth day, with the benchmark DAX Index posting its longest losing streak in 10 months, as U.S. data on leading economic indicators and Philadelphia-area manufacturing missed estimates.
Deutsche Lufthansa AG dropped 2.5 percent as wage talks with trade unions failed. Volkswagen AG, the world’s second-biggest carmaker, dropped to its lowest price in more than seven months. Infineon Technologies AG gained 1.5 percent after Morgan Stanley upgraded the shares.
The DAX Index lost 0.4 percent to 7,473.73 at the close of trading in Frankfurt, having earlier climbed as much as 0.7 percent. The equity benchmark has lost 1.8 percent this year after yesterday falling the most since Feb. 4. The broader HDAX Index also fell 0.4 percent today.
“The U.S. economic indicators were worse than expected which always seems to spook markets,” Felicity Smith, a fund manager at Bedlam Asset Management Plc in London, wrote in an e mail. “As an export-dependent market, Germany is sensitive to economic data from the rest of the world.”
About 8 percent of German exports are sold to the U.S., according to data from the Federal Statistics Office in Wiesbaden.
In the U.S., the index of leading indicators unexpectedly declined in March for the first time in seven months. The Conference Board’s gauge of the outlook for the next three to six months fell 0.1 percent in March after climbing 0.5 percent in the prior two months. The median forecast of economists surveyed by Bloomberg called for a 0.1 percent increase.
Manufacturing in the Philadelphia region expanded in April at a slower pace than projected. The Federal Reserve Bank of Philadelphia’s general economic index fell to 1.3 in April from 2 the prior month. Readings greater than zero signal expansion. The median forecast of economists surveyed by Bloomberg called for a gain to 3.
Applications for jobless insurance payments in the U.S. rose by 4,000 to 352,000 in the week ended April 13, in line with the median forecast of economists surveyed by Bloomberg.
German lawmakers approved a rescue for Cyprus as Finance Minister Wolfgang Schaeuble warned that refusing aid to a fifth crisis-ravaged state risked triggering a sovereign default and contagion to other euro nations.
Lufthansa retreated 2.5 percent to 13.98 euros. Labor union Ver.di said after the market closed yesterday that the airline’s offer of a 1.2 percent pay increase in 2013 and a 0.5 percent pay rise in 2014 was not enough to satisfy its 5.2 percent pay demand. More strikes at Europe’s second-largest carrier can now be expected, Ver.di said.
Preferred shares of Volkswagen extended their decline, falling 2.1 percent to 138.50 euros. Volkswagen lost 2.9 percent yesterday after the Brussels-based European Automobile Manufacturers’ Association, or ACEA, said European car registrations in March fell 10 percent, led by Germany’s auto market, which plummeted 17 percent.
Solarworld AG tumbled 28 percent to 67 euro cents, its lowest price since December 2003, after forecasting a 2012 net loss of 520 million euros ($678 million) to 550 million euros under local accounting rules, mainly on writedowns on stakes in and loans to units and affiliates. Equity capital will be about minus 20 million euros to minus 50 million euros, Germany’s biggest solar-panel maker said in a statement.
Infineon Technologies, Europe’s second-biggest semiconductor maker, gained 1.5 percent to 5.52 euros after Morgan Stanley raised the stock to equal weight from underweight, saying the shares now reflect a slower recovery in revenue and margins.
Bayer AG, Germany’s largest drugmaker, rose 1.6 percent to 78.79 euros. A gauge of chemical producers was among the biggest advancers of the 19 industry groups in the Stoxx Europe 600 Index.