Bloomberg News

German Stocks Retreat for Fourth Day, Extending Two-Year Low

September 06, 2011

Sept. 6 (Bloomberg) -- German shares fell for a fourth day, with the benchmark DAX Index closing at the lowest since July 2009, as a drop in factory orders added to concern that the European debt crisis is harming Europe’s largest economy.

Bayer AG tumbled the most in 2 1/2 years as U.S. regulators recommended that its blood thinner Xarelto not be approved to prevent stroke in people with the most common abnormal heart rhythm. Infineon Technologies AG lost 2.3 percent after Fairchild Semiconductor International Inc. lowered its sales forecast. Deutsche Bank AG and Commerzbank AG followed European financial shares lower.

The DAX slid 1 percent to 5,193.97 at the 5:30 p.m. close in Frankfurt after plummeting 5.3 percent yesterday. The index has retreated 31 percent from this year’s high on May 2 as reports in the U.S., Europe and China pointed toward a slowdown in global growth, which would curb demand for Germany’s exports. The broader HDAX Index also fell 1 percent today.

A report today showed that factory orders in Germany fell more in July than economists had forecast, led by a drop in export demand as the global economy cooled. Orders, adjusted for seasonal swings and inflation, dropped 2.8 percent from June, the Economy Ministry in Berlin said. The decline, the first in four months, exceeded the average economist prediction for a slide of 1.5 percent.

U.S. Non-Manufacturing

German stocks maintained declines even as the Institute for Supply Management’s index of U.S. non-manufacturing businesses increased to 53.3 in August from 52.7 in July. The measure was projected to drop to 51, according to the median forecast in a Bloomberg News survey.

“One good figure is not enough for the markets to stabilize,” said Heinz-Gerd Sonnenschein, an equity strategist at Deutsche Postbank AG in Bonn. “There’s huge nervousness among market participants.”

Bayer shares tumbled 7.5 percent to 37.75 euros, its biggest drop since March 2009. The U.S.’s Food and Drug Administration said in a staff report on Xarelto released today that “there is insufficient information about the drug to determine whether it is safe for use with its proposed labeling.”

Infineon, Europe’s second-biggest chipmaker, tumbled 2.3 percent to 5.15 euros as Fairchild Semiconductor lowered its third-quarter sales forecast to $400 million to $410 million from its previous prediction of $433 million to $446 million.

Deutsche Bank, Germany’s biggest bank, fell 0.9 percent to 23.51 euros after earlier rising as much as 3.3 percent. Commerzbank, the country’s second-largest lender, sank 3.4 percent to 1.75 euros, its lowest price in at least 19 years. Banking shares posted the worst performance among 19 industry groups in the benchmark Stoxx Europe 600 Index today, losing 2.1 percent.

--Editors: Angela Cullen, Andrew Rummer

To contact the reporters on this story: Peter Levring in Copenhagen at plevring1@bloomberg.net; Julie Cruz in Frankfurt at jcruz6@bloomberg.net

To contact the editor responsible for this story: Andrew Rummer at arummer@bloomberg.net


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