Banks, commods drag European stocks lower

                                
 * FTSEurofirst 300 index down 1.3 pct
                                
 * Banks lower; Natixis slumps
                                
 * Commods down as crude, metals retreat
                                
 By Joanne Frearson
                                
 LONDON, Aug 11 (Reuters) - European shares closed lower on
Tuesday in response to disappointing U.S. economic data, with
banking and commodity stocks weighing the most on the main
index.
                                
 The pan-European FTSEurofirst 300 <.FTEU3> index of top
shares closed down 1.3 percent at 932.22 points, losing for the
second day in a row after hitting its highest close in more than
nine months on Friday.
                                
 "We have had a couple of macro figures which did not please
the market. The U.S. labour costs and productivity figures are
worrying ... they simply mean that there are enormous
constraints on the consumer who are supposed to bail us all out
of this," said Heino Ruland, strategist at Ruland Research.
                                
 "Industry is just slashing costs all over the place ... it
means final demand may not be strong enough," he said.
                                
 Banks took the most points off the index. French bank
Natixis <CNAT.PA> slumped 17.5 percent after the firm's parent,
BCPE bank, told French market regulator AMF it did not plan to
delist the shares of Natixis. [ID:nB487944]
                                
 HSBC <HSBA.L>, Lloyds Banking Group <LLOY.L>, Barclays
<BARC.L> and Deutsche Bank <DBKGn.DE> were down 2.1-7.1 percent.
                                
 Commodity stocks were lower as crude <CLc1> fell 2.1 percent
and copper <MCU3=LX> slipped 0.8 percent on demand concerns. Oil
major BG Group <BG.L> lost 2.3 percent, while Rio Tinto <RIO.L>
and BHP Billiton <BLT.L> dropped 1.6 and 1.5 percent,
respectively.
                                
 Across Europe, the FTSE 100 <.FTSE> index was down 1.1
percent, Germany's DAX <.GDAXI> was 2.4 percent lower and
France's CAC 40 <.FCHI> fell 1.4 percent.
                                
 
                                
 FRIENDS PROVIDENT RETREATS
                                
 Insurers were in the doldrums. Friends Provident <FP.L>
retreated from earlier gains, down 2.7 percent as it posted a 38
percent drop in first-half underlying profit to 131 million
pounds, below forecast.
                                
 The British insurer earlier rose after agreeing a 1.86
billion pound ($3.07 billion) takeover by Resolution.
[ID:nLB614001]
                                
 Chemicals groups were also lower, with Bayer <BAYG.DE>
slipping 4 percent as the German chemical and drug company
denied market talk that the company was looking to raise more
capital. [ID:nWEA5598]
                                
 "We need a pullback to shake the tree to see if the rally is
really genuine," said David Buik, senior partner at BGC
Partners, in London. "Remember, there's billions on the
sidelines.
                                
 On the upside, electricity companies were among the top
performers. Power generation firm International Power <IPR.L>
gained 7.2 percent after it said its first-half operating profit
beat market expectations, driven by currency effects and a
strong performance in Asia and Australia. [ID:nLA452303]
                                
 Norwegian solar energy company Renewable Energy Corporation
<REC.OL> rose 5.3 percent after it voiced optimism about its two
biggest expansion projects. [ID:nLB349746]
                                
 Turning to macroeconomic data, U.S. unit labour costs, a
gauge of inflation and profit pressure closely watched by the
Federal Reserve, fell 5.8 percent, the biggest decline since the
second quarter of 2000, while non-farm productivity in the
second quarter rose at its fastest pace in six years.
[ID:nN11513288]
                                
 Investors were also disappointed as inventories at U.S.
wholesalers plummeted 1.7 percent in June, the tenth straight
monthly drop, which drove stocks to their lowest level in more
than two years, Commerce Department reported. [ID:nN11520426]
 (Additional reporting by Brian Gorman; editing by Simon Jessop)