June 10 (Bloomberg) -- German stocks fell, with the DAX Index posting the longest streak of weekly losses in almost three years, as concern grew the economy is weakening and policy makers clashed over how to solve Europe’s debt crisis.
EON AG and RWE AG declined with European utilities. ThyssenKrupp AG climbed 2.5 percent after Citigroup Inc. said that Germany’s largest steelmaker remains one of its “top picks in steel.”
The benchmark DAX Index slumped 1.3 percent to 7,069.9 at the 5:30 p.m. close in Frankfurt, posting a weekly drop of 0.6 percent. The gauge has declined for six straight weeks as reports on U.S. employment and factory orders added to concern that the economy is faltering. The broader HDAX Index slid 1.2 percent today.
“The U.S. market continues to price in a slower growing economy,” said Markus Huber, head of German sales trading at ETX Capital in London. “For economies that are already struggling, like Greece or Portugal, it’s absolute poison.”
Greek, Irish and Spanish benchmark bonds slumped after German Finance Minister Wolfgang Schaeuble intensified his calls for bondholders to assume a “fair” share of further Greek aid, pitting him against the European Central Bank, whose President Jean-Claude Trichet yesterday rejected any direct participation in a second bailout of the debt-stricken nation.
EON and RWE, Germany’s biggest utilities, lost 2.1 percent to 19.09 euros and 2.3 percent to 38.14 euros, respectively. A gauge of utilities in the benchmark Stoxx Europe 600 Index fell 1.8 percent.
Beiersdorf AG, the maker of Nivea skin creams, lost 2 percent to 44.89 euros, while Infineon Technologies AG, Europe’s second-biggest chipmaker, sank 2.4 percent to 7.46 euros.
ThyssenKrupp advanced 2.5 percent to 35.29 euros, the highest price in almost three years, after Citigroup said that the company’s American assets may generate high margins.
German stocks fell even as the Bundesbank raised its forecasts for German growth today, saying Europe’s largest economy has entered a broad and prolonged upswing.
Gross domestic product will expand 3.1 percent this year and 1.8 percent in 2012, the Frankfurt-based central bank said in its bi-annual economic outlook today. That compares with a February prediction by then Bundesbank President Axel Weber of 2.5 percent growth for this year and a December forecast of 1.5 percent for 2012.
A separate report showed inflation in Germany slowed in May as energy costs retreated. The inflation rate, calculated using a harmonized European Union method, dropped to 2.4 percent from 2.7 percent in April, the Federal Statistics Office in Wiesbaden said today, confirming its first estimate published on May 27. From April, consumer prices declined 0.2 percent.
--With assistance from Adria Cimino in Paris. Editors: Will Hadfield, Andrew Rummer
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