DAX Index Fluctuates Near One-Year High; RWE Drops, Metro Gains

By Julie Cruz

Oct. 15 (Bloomberg) -- German stocks swung between gains and losses near the highest level in a year before earnings reports from Goldman Sachs Group Inc. and Citigroup Inc. and economic data in the U.S.

E.ON AG and RWE AG, the country’s largest utilities, declined more than 1 percent as German electricity for delivery next year fell to the lowest in more than a week. Metro AG advanced 2.2 percent after JPMorgan Chase & Co. recommended shares of the nation’s biggest retailer.

The benchmark DAX Index slipped less than 0.1 percent to 5,852.35 at 12:13 p.m. in Frankfurt, after rising as much as 0.2 percent earlier. The measure has rallied 60 percent since March 6 as companies reported better-than-estimated earnings and economic data signaled the global recession is nearing an end. The broader HDAX Index decreased 0.1 percent today.

Goldman Sachs may say before the U.S. market opens that earnings almost tripled to $2.4 billion in the third quarter, according to analysts’ estimates compiled by Bloomberg. Citigroup is also scheduled to report results today.

Prices paid by U.S. consumers probably rose at a slower pace in September, showing inflation will not be a threat as the economy emerges from the recession, economists said before reports today. Other data may show manufacturing in the New York and Philadelphia regions continued to expand this month.

In Europe, consumer prices dropped for a fourth month in September as energy prices declined and companies cut jobs and reduced costs to weather the global economic slump.

Utilities

E.ON lost 1.5 percent to 26.53 euros, while smaller competitor RWE dropped 1.3 percent to 61.40 euros. Baseload electricity for 2010 in Europe’s biggest power market slid as much as 0.7 percent to 47.70 euros a megawatt-hour, its lowest since Oct. 6, according to broker data on Bloomberg.

K+S AG slipped 0.8 percent to 38.90 euros. Europe’s biggest potash producer was cut to “underweight” from “equal- weight” at Morgan Stanley, which cited “an unfavorable Chinese potash settlement.”

Metro climbed 2.2 percent to 39.95 euros, a sixth straight advance. The shares were raised to “overweight” from “neutral” at JPMorgan.

Deutsche Bank AG added 2 percent to 57.10 euros after the country’s biggest bank was raised to “outperform” from “underperform” at CA Cheuvreux.

Commerzbank AG rose 1.2 percent to 8.80 euros, extending yesterday’s 3.3 percent advance. Germany’s second-largest lender sold its Kleinwort Benson wealth management unit to RHJ International for 225 million pounds ($362 million) in cash to fulfill European Union demands for approving state aid.

Merck, Escada

Merck KGaA gained 1.6 percent to 70.36 euros. The German company and Dyesol Limited have entered an agreement to collaborate in the development of electrolytes for use in dye solar cells, Merck said.

Escada AG climbed 4.2 percent to 74 cents. The insolvent fashion company has received acquisition bids from at least five investors, including Sven Ley and his wife, Zoe Appleyard-Ley, Sueddeutsche Zeitung reported, without saying where it got the information.

Kuka AG rose 3.2 percent to 11.05 euros, extending yesterday’s 5.4 percent increase, as the German company whose robots assemble Jeep Wrangler bodies was raised to “buy” from “hold” at Berenberg Bank.

Stada Arzneimittel AG retreated 3.5 percent to 20.32 euros. Germany’s largest publicly traded maker of generic medicines was downgraded to “reduce” from “hold” at Commerzbank, which said in a report “we cannot call off the normal pricing pressure threat.”

Q-Cells SE slid 1.9 percent to 13.02 euros as the solar company was downgraded to “sell” from “hold” at DZ Bank AG, which said it expects “difficult” years in 2010 and 2011 because of cuts in solar energy subsidies. Solarworld AG slid 2.3 percent to 16.47 euros as the bank cut its stance to “hold” from “buy.”

To contact the reporter on this story: Julie Cruz in Frankfurt at jcruz6@bloomberg.net