German Stocks Drop as U.S. Services PMI Misses Estimates
German stocks retreated, after rallying the most in four weeks yesterday, as reports on service industries and hiring by companies in the U.S. trailed economists’ estimates.
Kloeckner & Co. retreated 4.2 percent as a gauge of commodity stocks posted the biggest drop among the 19 industry groups in the Stoxx Europe 600 Index. (SXXP) United Internet AG (UTDI) dropped 0.9 percent after UBS AG downgraded the shares.
The DAX Index (DAX) lost 0.9 percent to 7,874.75 at the close of trading in Frankfurt, its biggest drop in a week. The equity benchmark has still gained 3.5 percent this year amid speculation that central banks will maintain their stimulus measures. The broader HDAX Index slipped 0.8 percent today.
“We are seeing consolidation today,” Soeren Steinert, who helps manage about $24 billion as associate director for equities trading at Quoniam Asset Management GmbH, wrote in an e-mail. “Volumes are very low.”
The volume of shares changing hands in companies on the DAX was 31 percent lower than the average of the last 30 days, data compiled by Bloomberg showed.
In the U.S., companies hired 158,000 workers in March, figures from the Roseland, New Jersey-based ADP Research Institute showed today. The median forecast of 39 economists surveyed by Bloomberg had called for 200,000 net hires. Estimates ranged from gains of 170,000 to 240,000.
A measure of growth by service industries, which account for about 90 percent of the U.S. economy, grew at a slower pace in March than economists had forecast. The Institute for Supply Management’s non-manufacturing index slipped to 54.4 from 56 in February, falling short of the median economist estimate of 55.5. Readings above 50 mean that activity increased.
Kloeckner, Europe’s largest independent steel trader, declined 4.2 percent to 10.36 euros.
ThyssenKrupp AG (TKA), Germany’s biggest steelmaker, fell 4 percent to 15 euros.
Daimler AG (DAI), the third-biggest maker of luxury cars, slid 1.2 percent to 42.63 euros. Rival Bayerische Motoren Werke AG’s BMW reported a 13 percent U.S. sales increase in March, cutting into the luxury-auto lead of Daimler’s Mercedes-Benz.
United Internet dropped 0.9 percent to 19.25 euros after UBS downgraded the provider of phone and Internet services to neutral from buy.
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