Bloomberg News

Most German Stocks Retreat as U.S. Consumer Confidence Declines

October 25, 2011

Oct. 25 (Bloomberg) -- Most German stocks fell, with the DAX Index retreating from an 11-week high, as a report showed that U.S. consumer confidence plunged this month and investors awaited tomorrow’s European Union and euro-area summits.

Commerzbank AG, Germany’s second-biggest lender, dropped 1.5 percent. Puma SE declined 3 percent as the sporting-goods maker said it may face some “headwinds” in the fourth quarter. Daimler AG and MAN SE advanced as Swedish rival Volvo AB reported an 18 percent increase in sales.

The benchmark DAX Index dropped 0.1 percent to 6,046.75 at the close in Frankfurt, having earlier advanced as much as 1.7 percent. The benchmark measure yesterday rose to its highest level since Aug. 5. More than two stocks slid for every one that climbed today. The broader HDAX Index fell 0.3 percent.

Chancellor Angela Merkel and fellow leaders will return to Brussels tomorrow for the second euro-area summit in four days to discuss how to contain the region’s debt crisis. Policy makers seek an agreement on bolstering the region’s rescue fund, recapitalizing banks and providing debt relief to Greece to avoid contagion spreading to Italy and Spain. Leaders have yet to agree with banks on the size of losses that financial institutions will take on Greek bonds.

Tomorrow’s summit in Brussels follows an Oct. 23 meeting where euro-area politicians ruled out tapping the European Central Bank’s balance sheet to boost the European Financial Stability Facility, the region’s rescue fund. They also excluded a forced restructuring of Greece’s debt.

German Consumer Confidence

Consumer confidence will rise in November for the first time in eight months as higher salaries and improving job prospects temper concern that the euro area’s debt crisis will worsen, a report from market-research company GfK SE said.

GfK forecast that its consumer-sentiment index will climb to 5.3 next month from 5.2 in October. Economists had predicted a drop to 5.1, according to the median of 24 estimates in a Bloomberg News survey.

In the U.S., a release showed that consumer confidence unexpectedly slumped in October to the lowest level since March 2009, when the U.S. economy was in a recession, as Americans’ outlooks for employment and incomes soured.

Commerzbank, Volkswagen Fall

Commerzbank declined 1.5 percent to 1.73 euros, while Volkswagen AG, Europe’s biggest carmaker, slipped 1.7 percent to 120.65 euros.

Puma sank 3 percent to 228.70 euros as Europe’s second- largest sporting-goods maker may face some “headwinds” in the fourth quarter as raw-material prices rise and the company increases investment, General Manager Finance Michael Laemmermann said.

Puma’s athletic gear is not performing as well as competitors’ in North America, Chief Executive Officer Franz Koch said.

Daimler AG, the maker of Mercedes trucks and luxury cars, climbed 1.2 percent to 37.75 euros. MAN SE, the truckmaker that Volkswagen is seeking to control, advanced 0.8 percent to 63.27 euros.

Volvo AB, the world’s second-largest truckmaker, reported growth in sales in the third quarter as purchases in North and South America helped offset slowing demand in Europe and Asia. Volvo forecast that heavy-truck sales in North America will rise 20 percent next year.

Infineon Technologies AG, Europe’s second-biggest chipmaker, jumped 2.8 percent to 6.45 euros as competitor STMicroelectronics NV, the largest European chipmaker, forecast that fourth-quarter sales will miss analysts’ estimates.

--Editors: Will Hadfield, Andrew Rummer

To contact the reporter on this story: Peter Levring in Copenhagen at plevring1@bloomberg.net

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


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