German Stocks Fall for Second Day, Led by Commerzbank, Postbank

By Stefanie Haxel

Sept. 16 (Bloomberg) -- German stocks fell for a second day after Standard & Poor's and Moody's Investors Service cut their debt ratings for American International Group Inc., threatening efforts to keep the biggest U.S. insurer by assets afloat.

Commerzbank AG, Germany's second-largest bank, slumped 8.6 percent to the lowest in almost four years, and Deutsche Postbank AG slid 8 percent. Deutsche Bank AG dropped to a two-month low. Germany's biggest bank is among European bank stocks that investors should avoid, according to JPMorgan Chase & Co.

The DAX Index plunged 103.82, or 1.7 percent, to 5,960.34 as of 1:12 p.m. in Frankfurt. DAX futures expiring in September lost 1.5 percent to 5,961. The HDAX Index of the country's 110 biggest companies declined 1.6 percent.

``We are in a downside spiral and the end isn't in sight yet,'' said Matthias Jasper, head of equities at WGZ Bank in Dusseldorf, in a telephone interview. ``Investors fear a domino effect or financial market tsunami.''

The DAX has fallen 26 percent this year as credit losses and writedowns at financial firms worldwide topped $500 billion and slowing economic growth damped the outlook for earnings.

AIG had its long-term counterparty rating lowered three grades to A- from AA- by S&P, which cited a reduced flexibility in meeting additional collateral needs and concerns over increasing residential mortgage-related losses. AIG's senior unsecured debt rating was downgraded by Moody's to A2 from Aa3.

Commerzbank

Commerzbank declined 1.375 euros to 14.535, the lowest since November 2004. Postbank, Germany's biggest consumer bank by clients, fell 3.18 euros to 36.58, the biggest drop since 2004.

Deutsche Bank lost 1.525 euros, or 2.8 percent, to 52.685, the lowest since July 16. The company may be counterparty to bankrupt Lehman Brothers Holdings Inc., JPMorgan analysts including Kian Abouhossein wrote in a note to clients. Investors should ``avoid banks with large trading operations,'' he said. Deutsche Bank spokesman Christian Streckert declined to comment.

Crude oil for October delivery extended its slide, dipping below $92 a barrel, on concern that turmoil on Wall Street may weaken the global economy and reduce demand.

Deutsche Lufthansa AG added 21.5 cents, or 1.5 percent, to 15.05 euros. Europe's second-largest airline, which yesterday agreed to purchase 45 percent of Brussels Airlines, may be a preferred buyer for Alitalia SpA, Italian Prime Minister Silivo Berlusconi said during the taping of the ``Porta a Porta'' talk show in Rome.

Henkel AG & Co. KGaA, the maker of Loctite glue and Persil detergent, climbed for a fourth day, adding 41 cents, or 1.5 percent, to 27.95 euros.

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

Abromedia AG (RBX GY) rallied 79 cents, or 9 percent, to 9.54 euros, the highest in more than seven years. Goldbach Media AG, Switzerland's biggest seller of online advertising, took control of the marketer of advertising space and offered to pay 9.80 euros per share for the 27 percent is doesn't own.

BASF SE (BAS GY) dropped for a second day, losing 86 cents, or 2.4 percent, to 35.38 euros. Moody's Investors Service said it is reviewing its long-term credit ratings on the world's largest chemical maker for downgrade after the company agreed to buy Switzerland's Ciba Holding AG.

Separately, CA Cheuvreux lowered its share-price estimate 9 percent to 39 euros.

Bayer AG (BAY GY) rose 1.14 euros, or 2 percent, to 57.08, the highest in seven months. Germany's largest drugmaker climbed on renewed speculation Pfizer Inc. will bid for the company.

Premiere AG (PRE GY), the pay-television company partly owned by News Corp., gained 15 cents, or 1.3 percent, to 11.50 euros. Germany's DFL soccer league will end a broadcast-rights marketing contract with Sirius Sportmedia GmbH, Handelsblatt reported.

``This would put Premiere in the best position to get the broadcast rights for Germany's top soccer league,'' said Sonia Rabussier, an analyst at Sal. Oppenheim jr. & Cie. in Frankfurt. Sal. Oppenheim has a ``neutral'' recommendation on the stock.

SAP AG (SAP GY) increased 45 cents, or 1.2 percent, to 38.60. Credit Suisse Group AG raised its recommendation for the world's largest maker of business-management software to ``outperform'' from ``neutral,'' citing potential for higher profitability.

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