German Stocks Decline, Led by Merck, Allianz; Daimler Advances

By Henrietta Rumberger

Oct. 24 (Bloomberg) -- German benchmarks DAX Index dropped, led by Merck KGaA after the company reported a decline in third- quarter earnings. Allianz SE also retreated.

Daimler AG, the world's largest truckmaker, paced rising shares after Volvo AB raised its outlook for the European heavy truck market this year. RWE AG climbed after brokerages lifted their recommendations on the stock.

The DAX Index lost 13.83, or 0.2 percent, to 7,828.96. DAX futures expiring in December fell 2.5, or less than 0.1 percent, to 7,888 as of 5:43 p.m. in Frankfurt. The HDAX Index of the country's 110 biggest companies decreased 0.3 percent.

Merck slid 1.22 euros, or 1.4 percent, to 87.78 euros. Europe's largest biotechnology company said third-quarter profit declined 75 percent to 36.2 million euros ($51.6 million) on writedowns from the purchase of Switzerland's Serono SA.

Merck paid $14 billion for Serono to cut reliance on liquid crystals used in flat panel televisions and add funds to develop more medicines.

Allianz, Europe's largest insurer, retreated 2.64 euros, or 1.7 percent, to 152.02 euros.

RWE added 1.51 euros, or 1.6 percent, to 94.55 euros. Goldman, Sachs & Co. raised its recommendation on the shares of Germany's second-largest utility to ``neutral'' from ``sell.''

Societe Generale also lifted its recommendation to ``buy'' from ``sell.'' The brokerage upgraded European utility stocks to ``overweight'' from ``underweight.''

Daimler, where the heavy-truck division was the second-most profitable unit after the Mercedes passenger car business last year, gained 1.06 euros, or 1.5 percent, to 74.30 euros.

Volvo, the world's second-largest truck maker, raised its 2007 European industry forecast to 340,000 trucks from 330,000 previously. Sales last year totaled 295,000 vehicles.

The following stocks also gained or fell in Germany. Stock symbols are in parentheses.

Bauer AG (B5A GY) rallied 3.77 euros, or 7.7 percent, to 53.06 euros. The construction company that sold shares last year raised its full-year profit forecast 10 percent, citing ``excellent business development.'

DAB Bank AG (DRN GY) gained 23 cents, or 3.5 percent, to 6.72 euros. The online broker controlled by UniCredit SpA said third-quarter profit was little changed from a year earlier, hurt by a tax charge. Net income was 4.3 million euros, almost exactly the same as the year-earlier quarter, DAB said today.

Commission income, its biggest source of revenue, was boosted by ``heavy trading activity'' because of volatility in the stock markets.

Demag Cranes AG (D9C GY) rose 95 cents, or 2.6 percent, to 38 euros. The world's largest maker of mobile harbor cranes said full-year operating profit beat the company's forecast after the port technology division booked record fourth-quarter orders.

Earnings before interest and tax for the fiscal year ended Sept. 30 were 94.6 million euros, higher than the 93 million euros forecast in July, the company said today.

Itelligence AG (ILH GY) soared 1.35 euros, or 29 percent, to 6.05 euros. NTT Data Corp., a Japanese information technology company, offered to buy the German computer-services company that provides business applications, for 152.5 million euros, or 6.20 euros per share, in cash.

Porsche AG (POR3 GY) gained 19.82 euros, or 1.2 percent, to 1,728.23 euros. The maker of the 911 sports car today won a court case against Volkswagen AG labor leaders, allowing Porsche to proceed with setting up a European company structure that avoids stricter national labor representation rules.

Volkswagen shares climbed 2.82 euros, or 1.7 percent, to 172.55 euros.

Software AG (SOW GY) advanced 78 cents, or 1.3 percent, to 61.18 euros. Merrill Lynch & Co. added shares of Germany's second-largest software maker to its list of ``most preferred'' European technology shares. ``Strong growth at a very reasonable valuation should drive share price performance,'' the analysts including Andrew Griffin wrote in a note to investors.

Westag & Getalit AG (WUG GR) added 71 cents, or 4 percent, to 18.70 euros. The building supplies maker said nine-month net income rose to 7.3 million euros from 5.2 million euros in the year-earlier period. The company also said it will beat its full- year forecast.