By Stefanie Haxel
Feb. 12 (Bloomberg) -- German stocks fell, led by carmakers, after U.S. lawmakers agreed on an economic stimulus plan that includes a smaller-than-proposed tax break for buyers of new cars.
Volkswagen AG, Europe’s largest carmaker, and Daimler AG both fell more than 3 percent. Commerzbank AG dropped for a third day after Morgan Stanley downgraded Germany’s second- largest bank. ThyssenKrupp AG fell 3.2 percent after Deutsche Bank AG lowered the steelmaker’s share-price estimate, saying the “power of declining capacity utilization is still underestimated by the market.”
The benchmark DAX Index dropped 2.1 percent to 4,434.58 as of 12:28 p.m. in Frankfurt. DAX futures expiring in March fell 2.3 percent, while the broader HDAX Index sank 2.1 percent.
Lawmakers in the U.S. Congress said yesterday they had agreed on a $789 billion plan to revive the economy, a smaller bill than originally approved by both groups. An $11 billion Senate proposal to boost the auto industry by allowing car buyers to take a tax write-off on their interest payments was cut to about $2 billion, according to Senator Barbara Mikulski, a Maryland Democrat.
“Overall, the package for the auto industry is smaller than expected, especially the tax breaks for car buyers,” Commerzbank analysts Daniel Schwarz and Gregor Claussen wrote in a note to clients today, calling that “slightly negative.”
Volkswagen sank 4.8 percent to 257.25 euros. Daimler, the world’s second-largest maker of luxury cars, retreated 3.3 percent to 23.915 euros.
Continental AG, Europe’s second-largest car-parts maker, plunged 6.6 percent to 15.11 euros. The company’s tire factory in Portugal is cutting production and has frozen an expansion plan, Jornal de Negocios reported, citing the head of the Continental Mabor unit in Portugal.
Commerzbank lost 5.7 percent to 3.47 euros. Morgan Stanley cut its recommendation on the stock to “underweight” from “equal weight,” citing the bank’s “high leverage.”
ThyssenKrupp, Germany’s biggest steelmaker, dropped 3.2 percent to 17.64 euros, a one-week low. The company’s steel and stainless units “focus on flat products and are therefore highly geared to consumer spending which holds a considerable volume risk,” London-based analysts Richard Smith and Mairead Smith wrote in a note to clients today. “We believe the power of declining capacity utilization is still underestimated.”
Infineon Technologies AG lost 4.6 percent to 72.5 cents, a third consecutive drop. Chief Executive Officer Peter Bauer said he will take a 20 percent pay cut in 2009 as Europe’s second- largest maker of semiconductors faces a “difficult year” filled with “many tough challenges.”
The comments were made in an advance copy of a speech to be delivered at the company’s annual shareholders meeting today.
E.ON AG, Germany’s biggest utility, declined 1.4 percent to 23.92 euros. RWE AG, the country second-largest, dropped 2.5 percent to 59.59 euros.
Electricite de France SA, Europe’s biggest power producer, will sell assets to cut debt after 2008 earnings fell and missed estimates on costs associated with regulated power rates.
The following stocks also rose or fell in German markets. Symbols are in parentheses.
CTS Eventim AG (EVD GY) increased 5.3 percent to 20 euros. The ticketing company that markets performers including Bruce Springsteen and Bon Jovi said full-year earnings before interest, taxes, depreciation and amortization rose 7 percent to 57.8 million euros.
Gildemeister AG (GIL GY) gained 2 percent to 6.17 euros. The maker of milling machines used by the Red Bull Formula One racing team said 2008 profit rose 62 percent to 81.1 million euros ($104.7 million).
To contact the reporter on this story: Stefanie Haxel in Frankfurt at shaxel@bloomberg.net.
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