June 23 (Bloomberg) -- German stocks fell for a second day after the Federal Reserve cut its growth forecast for the U.S. economy and failed to signal further stimulus measures.
Bayer AG plunged the most since March 2009 after a study showed that a competing blood thinner prevented more strokes in patients with irregular heartbeats than the traditional treatment. Hochtief AG fell after Exane BNP Paribas cut its forecast for European building-materials companies. Merck KGaA advanced 1.4 percent.
The DAX Index tumbled 128.75, or 1.8 percent, to 7,149.44 at the 5:30 p.m. close in Frankfurt. The gauge has fallen 5 percent from this year’s high on May 2 as investors speculated that the U.S. economic recovery is slowing and that Greece will fail to repay all of its debt. The broader HDAX Index slid 1.7 percent.
“There was the hope that the Fed would say there was downside pressure on growth, but they would support the market,” said Joshua Raymond, chief market strategist at City Index in London. “But we didn’t get that. It’s natural to take profits off the table now.”
Fed officials lowered their forecasts for U.S. growth and employment this year and next, predicting that the economy will expand by 2.7 percent to 2.9 percent in 2011, down from an earlier projection of 3.1 percent to 3.3 percent.
Declining house prices, high unemployment and weaknesses in the financial system may restrain the economic recovery in the longer term, Fed Chairman Ben S. Bernanke said.
European Central Bank President Jean-Claude Trichet said yesterday that risk signals for financial stability in the euro area are flashing red as the region’s sovereign-debt crisis threatens to infect banks.
Bayer sank 6.3 percent to 54.40 euros, its biggest drop in more than two years. A study showed that Pfizer Inc.’s and Bristol-Myers Squibb Co.’s experimental blood thinner apixaban, a rival to Bayer’s Xarelto, prevented more strokes with less major bleeding than the half-century-old drug warfarin in patients with atrial fibrillation.
ThyssenKrupp AG, Germany’s largest steelmaker, sank 3.4 percent to 34.20 euros. The stock was cut to “neutral” from “buy” at Oddo Securities.
Hochtief lost 2.3 percent to 58.46 euros. Exane cut its 2011 European building materials forecast for earnings before interest taxes depreciation and amortization by 3.4 percent, and its 2012 EBITDA estimate by 3.3 percent.
Merck KGaA gained 1.4 percent to 74.01 euros after the stock was raised to “outperform” from “market perform” at Sanford C. Bernstein & Co.
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