German Stocks Little Changed After U.S. Payrolls JumpJonathan Morgan
German stocks were little changed near a record after a report showed U.S. payrolls rose in October more than forecast.
Puma SE, Europe’s second-largest sporting-goods maker, fell 1.2 percent after lowering its full-year profit forecast. K+S AG added 1.5 percent after JPMorgan Chase & Co. upgraded its recommendation on the potash distributor.
The DAX slipped less than 0.1 percent to 9,078.28 at the close of trading in Frankfurt, paring earlier losses of as much as 1 percent. The index, which gained 0.8 percent this week, closed at a record yesterday after the European Central Bank, led by President Mario Draghi, unexpectedly cut its main refinancing rate by 25 basis points to 0.25 percent. The broader HDAX Index retreated 0.1 percent today.
“The U.S. jobs data are good,” Robert Halver, head of capital markets research at Baader Bank AG in Frankfurt, said in a telephone interview. “It is nice from a fundamentals perspective to have a stable economic picture but there is no immediate need to talk about tapering.”
U.S. payrolls increased in October more than forecast, Labor Department figures showed. The addition of 204,000 workers last month followed a revised 163,000 gain in September. The median forecast of 91 economists surveyed by Bloomberg called for a 120,000 advance. The unemployment rate rose to 7.3 percent from an almost five-year low.
A U.S. Commerce Department report yesterday showed that the world’s largest economy grew at a better-than-estimated 2.8 percent annual rate in the third quarter, renewing speculation that the reductions may come sooner.
A Bloomberg News survey last month showed economists expected the Federal Reserve’s quantitative easing to continue for several months. The Fed won’t begin tapering bond buying until March and will continue its purchases until October, according to the median estimate of 40 analysts in that poll.
Standard & Poor’s lowered France’s long-term foreign and local-currency credit rating one step to AA from AA+ today, with a stable outlook. The ratings company said slower growth will constrain the government’s ability to improve public finances.
The yield on France’s 10-year government bond expiring in 2023 increased 6.9 basis points to 2.22 percent. Since S&P’s first downgrade on Jan. 13, 2012, French government bonds returned more than 10 percent, according to the Bloomberg France Sovereign Bond Index.
Puma retreated 1.2 percent to 220.60 euros after lowering its full-year profit forecast, saying it will book one-time charges of about 130 million euros ($174 million) this quarter. Earnings for the year will be significantly below those of 2012, said Puma.
K+S added 1.5 percent to 20.81 euros. JPMorgan upgraded Europe’s biggest potash distributor to neutral from underweight, citing stabilizing prices and expectations that a restructure of the company will be announced with its third-quarter results.
Allianz SE climbed 1 percent to 124.25 euros. Europe’s biggest insurer increased its target for full-year operating profit after third-quarter earnings beat analysts’ estimates.
Net income advanced to 1.45 billion euros from 1.36 billion euros a year earlier, the Munich-based company said in a statement. That compared with the 1.37 billion-euro average estimate of 14 analysts surveyed by Bloomberg.
Deutsche Lufthansa AG rose 1.8 percent to 14.49 euros. The carrier’s low-cost Germanwings unit reiterated a forecast to cut operating losses by 90 million euros by the end of the year as returns improve on European short-haul routes.
“We will accomplish an improved result this year if conditions remain the same,” Germanwings Chief Executive Officer Thomas Winkelmann said in an interview in Hamburg yesterday.
The volume of shares changing hands in DAX-listed companies was 6.7 percent greater than the average of the past 30 days, according to data compiled by Bloomberg.