German Stocks Fall a Fourth Day, Led by Banks; SAP Shares Gain

By Stefanie Haxel

July 29 (Bloomberg) -- German stocks fell for a fourth day on concern the credit crunch may widen after Merrill Lynch & Co. said it will sell $8.5 billion of stock and liquidate some bonds to shore up credit ratings imperiled by mortgage losses.

Deutsche Bank AG, Germany's largest, and Commerzbank led financial shares lower. Deutsche Lufthansa AG, Europe's second- largest airline, fell as employees widened protests on the second day of a walkout over pay.

SAP AG, the world's largest maker of business-management software, climbed to a seven-month high after raising its sales and profit margin forecasts.

The DAX Index fell 42.76, or 0.7 percent, to 6,308.39 as of 1:14 p.m. in Frankfurt. DAX futures expiring in September declined 0.6 percent to 6,349. The HDAX Index of the country's 110 biggest companies lost 0.8 percent to 3,198.98.

``Merrill Lynch is weighing on the market sentiment,'' said Gerhard Schwarz, an equity strategist at UniCredit Markets & Investment Banking in Munich. ``It reminds investors of the risk factors and that the financial crisis isn't over yet.''

Merrill Lynch, the third-biggest U.S. securities firm, also plans to liquidate $30.6 billions of bonds at a fifth of their face value.

Deutsche Bank lost 1.79 euros, or 3.1 percent, to 56.57, the lowest in almost two weeks. Commerzbank, Germany's second-largest bank, dropped 50 cents, or 2.4 percent, to 20.16 euros. Hypo Real Estate Holding AG, the country's second-biggest commercial- property lender, sank 40 cents, or 2.3 percent, to 16.75 euros.

Eroding Spending

Consumer prices in five German states rose in July, led by surging energy costs. Rising food and oil prices are eroding the spending power of companies and households, pushing consumer confidence to the lowest in more than five years.

Henkel AG fell 74 cents, or 2.8 percent, to 25.41 euros. The maker of Loctite glue and Persil detergent snapped a nine-day advance. Metro AG, Germany's largest retailer, lost 95 cents, or 2.5 percent, to 36.62 euros.

Deutsche Lufthansa slid for a fourth day, losing 20 cents, or 1.3 percent, to 14.79 euros. The carrier canceled 70 flights and grounded 9 planes today, representing about 3 percent of its air traffic, Lufthansa spokesman Jan Baerwalde said in a telephone interview. The Ver.di labor union is seeking a pay increase of 9.8 percent, compared with Lufthansa's offer of 6.7 percent in two steps.

Separately, crude oil for September delivery rose for a second day in New York, trading near $125 a barrel on concern that attack on a Royal Dutch Shell Plc pipeline in Nigeria signaled a renewed campaign by militants.

Bayerische Motoren Werke AG, the world's biggest luxury carmaker, lost 86 cents, or 2.9 percent, to 28.89 euros. MAN AG, Europe's third-largest truckmaker, declined 1.52 euros, or 2.3 percent, to 63.69.

SAP gained 2.47 euros, or 7.3 percent, to 36.42, the highest since December 2007. The software maker said revenue and margins will be at the upper end of its forecast ranges this year after second-quarter license sales beat analyst's estimates.

The following stocks also rose or fell in German markets. Symbols are in parentheses.

Hugo Boss AG (BOS3 GY) plunged for a third day, losing 1.37 euros, or 5.6 percent, to 23.07. Bankhaus Lampe cut its share- price estimate for Germany's largest clothing company 26 percent to 26 euros, saying the market environment deteriorated and Hugo Boss is struggling with headwinds from currency exchange rates.

IDS Scheer AG (IDS GY) rallied 57 cents, or 7.1 percent, to 8.55 euros, the largest gain in almost a week. The software maker reported a 23 percent decline in second-quarter profit that was ``better than consensus expectations,'' according to Sal. Oppenheim Jr. & Cie.

``Close ties to SAP make us confident that IDS Scheer will survive its current turmoil,'' Frankfurt-based analyst Henning Steinbrink wrote in a note to clients today. He has a ``neutral'' recommendation on the stock.

Pfeiffer Vacuum Technology AG (PFV GY) fell 78 cents, or 1.4 percent, to 55.22 euros, the lowest in more than four months. The maker of vacuum pumps used in the production of DVDs and instant coffee reported quarterly profit after tax declined 14 percent to 8.4 million euros ($13.2 million) after sales in the U.S. slumped.

R. Stahl AG (RSL1 GY) climbed for a first time in four days, adding 1 euro, or 3.2 percent, to 32.50 euros. The world's second-largest maker of fireproof electrical equipment for factories reported first-half pretax profit increased on sales outside its home market in Germany.

Sartorius AG (SRT GY) lost 53 cents, or 2.5 percent, to 20.47 euros, the lowest in a week. The maker of laboratory scales and filtering equipment founded in 1870 said is won't reach its full-year forecasts.

Singulus Technologies AG (SNG GY) plunged 60 cents, or 9.2 percent, to 5.96 euros, the lowest in 10 years. HSBC Holdings Plc issued cut its share price estimate for the maker of machines that replicate compact discs 7.7 percent to 6 euros, citing lower demand.

To contact the reporter on this story: Stefanie Haxel in Frankfurt at shaxel@bloomberg.net or