By Stefanie Haxel

June 3 (Bloomberg) -- German stocks declined for the first time in four days as UBS AG advised investors to sell Salzgitter AG and U.S. employers cut more jobs than forecast last month.

Salzgitter dropped for the first time this week, falling 5.7 percent after UBS cut its recommendation for Germany’s second-largest steelmaker. Bayerische Motoren Werke AG and Daimler AG, the world’s biggest luxury-car makers, retreated after U.S. car sales slid in May.

The benchmark DAX Index decreased 1.7 percent to 5,054.53, trimming its rebound from this year’s lows to 38 percent. The HDAX Index of Germany’s biggest companies also sank 1.7 percent.

“We are seeing a trend-confirming correction,” said Philipp Musil, head of equities at Constantia Privatbank in Vienna. “Early indicators are pointing upwards despite negative hard economic data and the market is still showing strength.”

Companies in the U.S. cut an estimated 532,000 workers from payrolls in May, more than forecast by economists in a Bloomberg News survey, a report by ADP Employer Services showed today.

Separate reports showed service industries in the world’s biggest economy contracted at a slower pace in May, while orders placed at U.S. factories in April rose for the second time in three months.

Salzgitter slid 5.7 percent to 66.76 euros as UBS downgraded Germany’s second-largest steelmaker to “sell” from “neutral,” saying “the upside is now fully priced in.”

BMW lost 1.4 percent to 27.105 euros. The world’s biggest luxury-car maker said U.S. sales fell 28 percent in May. Rival Daimler sank 3.5 percent to 26.95 euros after U.S. sales of its Mercedes-Benz Cars division fell 33 percent last month. The automaker has almost a fifth of its revenue in the U.S., according to Bloomberg data.

Metro, Adidas

Metro AG lost 6.5 percent to 35.41 euros. Adidas AG, the world’s second-largest sporting goods maker, fell 1.8 percent to 26.30 euros, while Beiersdorf AG, the maker of Nivea skin creams, retreated 1.4 percent to 35.01 euros.

Deutsche Bank AG declined 3.9 percent to 46.41 euros. Executives of the bank’s fund unit, DWS, last year earned less than half of what they made in 2007 after overseeing a decline in profit, Financial Times Deutschland reported, citing a company report.

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

Curanum AG (BHS GY) dropped 5.3 percent to 3.22 euros after Goldman Sachs Group Inc. downgraded the operator of 68 nursing homes in Germany to “sell” from “neutral.”

Loewe AG (LOE GY) rallied 6.2 percent to 8.87 euros as Goldman Sachs raised its recommendation for the television maker partly owned by Sharp Corp. to “buy” from “neutral.”

Rhoen-Klinikum AG (RHK GY) advanced 3.3 percent to 14.88 euros. Goldman Sachs raised its share-price estimate for the hospital operator 2.5 percent to 20.50 euros.

Wacker Chemie AG (WCH GY) fell 2.9 percent to 91.30 euros, snapping a two-day gain. Morgan Stanley downgraded the maker of chemicals and silicon wafers used in microchips to “equal weight” from “overweight.”

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