German Stocks Advance; DAX Index Gains 0.4%Jonathan Morgan
German stocks advanced, snapping a two-day decline for the DAX Index, as reports showed the U.S. economy grew more in the second quarter than initially estimated and jobless claims last week fell more than expected.
Volkswagen AG and Continental AG each rose more than 1 percent, as a gauge of European carmakers climbed on the Stoxx Europe 600 Index. Gildemeister AG added 2.7 percent as Equinet AG said the cutting-tool maker’s plans to build plants in local markets will help profitability.
The DAX increased 0.5 percent to 8,194.55 at the close in Frankfurt. The gauge lost 3.3 percent over the past two days on concern the U.S. and U.K. will take military action against Syria. Secretary of State John Kerry said this week that America will hold the Middle Eastern nation’s government liable for chemical-weapons attacks that opposition groups say killed as many as 1,300 civilians. The HDAX Index rose 0.6 percent today.
“There is a little rebound in equity markets as economic fundamentals come back to the attention of investors,” Robert Halver, head of capital markets research at Baader Bank AG in Frankfurt, said in a telephone interview.
The U.S. economy expanded at a faster pace in the second quarter, Commerce Department figures showed today in Washington. Gross domestic product rose at a 2.5 percent annualized rate, up from an initial estimate of 1.7 percent. The median forecast of 79 economists surveyed by Bloomberg was for a 2.2 percent gain.
Separate data showed that the number of Americans filing applications for unemployment benefits fell last week more than forecast.
Jobless claims in the week ended Aug. 24 dropped 6,000 to 331,000 from a revised 337,000 the week before that was higher than initially reported, the Labor Department said today in Washington. The median forecast of 50 economists surveyed by Bloomberg called for a drop to 332,000.
German unemployment unexpectedly increased in August for the first time in three months. The number of people out of work rose by a seasonally adjusted 7,000 to 2.95 million, the Nuremberg-based Federal Labor Agency said. The median estimate in a Bloomberg News survey predicted a decline of 5,000. The adjusted jobless rate stayed near a 20-year low of 6.8 percent.
Volkswagen, Europe’s biggest automaker, added 1.1 percent to 174.20 euros. Continental, Europe’s second-largest auto-parts supplier, increased 3.9 percent to 116.35 euros. A gauge of auto-related stocks posted the third-biggest gain of the 19 industry groups on the Stoxx 600.
Gildemeister advanced 2.7 percent to 16.73 euros. The company will use the proceeds of a rights offer, detailed late yesterday, to build production facilities in local markets, including Russia. This will help eliminate cost disadvantages, Equinet said in a note today.
“Over time, this is very likely to provide a substantial boost in their efforts to drive profitability,” according to the bank.
Deutsche Lufthansa AG rebounded 2.1 percent to 13.78 euros. Europe’s second-biggest airline slid 6.7 percent over the past two days as the price of oil jumped on concerns conflict in Syria could disrupt supplies from the region.
A measure of travel and leisure stocks was the second-biggest advancers on the Stoxx 600.
The volume of shares changing hands in DAX-listed companies was 15 percent lower than the average of the last 30 days, according to data compiled by Bloomberg.