German Stocks Decline for Fifth Day; Steelmakers, K+S Retreat

By Stefanie Haxel

Jan. 13 (Bloomberg) -- German stocks fell for a fifth day as an additional stimulus package forged by Chancellor Angela Merkel’s coalition failed to ease concern the economic slump will curb corporate profits.

ThyssenKrupp AG and Salzgitter AG, Germany’s biggest steelmakers, dropped at least 3 percent after Alcoa Inc. of the U.S. posted its first quarterly net loss in six years, fueling concern demand for metals may decline further. K+S AG sank to a one-month low. Europe’s largest producer of potash used in fertilizers said it doesn’t plan any production cuts beyond what it already announced in December.

The benchmark DAX Index slipped 1.2 percent to 4,665.17 as of 9:51 a.m. in Frankfurt. DAX futures expiring in March dropped 1.2 percent. The broader HDAX also decreased 1.2 percent.

Germany’s coalition government agreed to spend an additional 50 billion euros ($66 billion) this year and next, its second attempt to stem the worst recession since World War II in Europe’s largest economy.

“The package is priced in and though it’s a huge amount, it’s quite small in international comparison.” said Matthias Jasper, head of equities at WGZ Bank in Dusseldorf. “I expect the coming earnings season to be the worst and weakest ever and a constant negative news flow.”

The DAX Index tumbled 40 percent in 2008 as credit-related losses and writedowns at financial firms topped $1 trillion worldwide amid the financial market turmoil.

ThyssenKrupp, Germany’s largest steelmaker, retreated 3.9 percent to 17.79 euros. Salzgitter, the second-biggest, dropped 3.3 percent to 51.16 euros.

Alcoa Loss

Alcoa reported a fourth-quarter net loss of $1.19 billion, compared with net income of $632 million a year earlier. The largest U.S. aluminum producer cited “historic” price declines and said demand for the metal may continue to weaken in 2009.

K+S dropped 3.4 percent to 36.60 euros. The potash maker doesn’t plan further measures to reduce output beyond the introduction of temporary short-time hours at three of its production sites this month, company spokesman Oliver Morgenthal said in response to a call by Bloomberg News.

U.S. rival Mosaic Co. plans to cut 1,000 jobs in Canada as sales slow and inventories are growing, broadcaster CBC News reported on its Web site.

Deutsche Postbank AG climbed 5.3 percent to 13.53 euros. Deutsche Bank AG said it’s sticking to plans to buy a stake in the retail lender in the first quarter. Deutsche Bank declined to comment on a report in the Handelsblatt newspaper that it is seeking to change the terms of the Postbank deal, spokesman Michael Lermer said today by telephone.

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