BofA, GE results drag European shares lower

                                
 * FTSEurofirst 300 falls 0.8 pct, down from 1-yr high
                                
 * BofA, GE results weigh on sentiment
                                
 * For up-to-the-minute market news, click on [STXNEWS/EU]
                                
 
                                
 By Dominic Lau
                                
 LONDON, Oct 16 (Reuters) - Disappointing third-quarter
results from Bank of America <BAC.N> and General Electric <GE.N>
and weak U.S. consumer sentiment survey dragged European shares
lower on Friday from a one-year high.
                                
 The FTSEurofirst 300 <.FTEU3> index closed 0.8 percent lower
at 1,009.62 points after trading as high as 1,026.43 in the
morning session -- its highest level since Oct. 7, 2008.
                                
 But results from Bank of America and U.S. conglomerate
General Electric countered the positive momentum created by IBM
<IBM.N> and Google's <GOOG.O> earnings figures overnight.
                                
 "The bar has been raised. You could have effectively
announced poor results in Q2 and then the stock would be up 5
percent," said Robert Quinn, European strategist at Standard &
Poor's equity research in London.
                                
 Financials were the top losers in Europe, with Deutsche Bank
<DBKGn.DE>, Commerzbank <CBKG.DE>, BNP Paribas <BNPP.PA>,
Societe Generale <SOGN.PA> and HSBC <HSBA.L> falling 2 to 3
percent.
                                
 Bank of America posted a wider than expected third-quarter
loss as an improvement in its Merrill Lynch investment banking
unit failed to offset consumer credit woes, while General
Electric's revenue missed market expectations.
                                
 A Reuters/University of Michigan Surveys of Consumers report
also weighed on the market. It showed U.S. consumer sentiment
fell unexpectedly in October on persistent worries that the
"dismal" state of personal finances would not recover quickly
from the worst recession in decades. [ID:nN16349157]
                                
 "Final demand within the U.S. economy and within the
European economy hasn't really caught up with expectations
pricing in the equity market," Quinn said.
                                
 The index, which slumped 45 percent last year, is up 21.4
percent in 2009 and has surged more than 56 percent since
hitting a record low in early March, driven by low valuations
and signs of improving economic data.
                                
 But the sharp rally has raised questions whether it has gone
too far, too fast, while the recovery remains patchy.
                                
 "We're still in a upside trend on the market, but it won't
last unless we see companies' revenues starting to rise again.
And it's not the case for now," said Jacques Henry, analyst at
Louis Capital Markets, in Paris.
                                
 Concerns over corporate earnings and the strength of the
economic recovery also took the shine off mining shares as well
as raw material prices <MCU3>.
                                
 BHP Billiton <BLT.L>, Rio Tinto <RIO.L>, Anglo American
<AAL.L>, Xstrata <XTA.L>, Vedanta Resources <VED.L> and Eurasian
Natural Resources <ENRC.L> lost between 0.4 and 2.4 percent.
                                
 
                                
 SLICK OILS, SWEDISH MATCH UP
                                
 Heavyweight oil producers held on to earlier gains, despite
crude prices <CLc1> reversing to trade down in the afternoon. BP
<BP.L>, Royal Dutch Shell <RDSa.AS> and Total <TOTF.PA> advanced
0.6-1.7 percent.
                                
 Sweden's Ericsson <ERICb.ST> gained 2 percent after mobile
phone maker Sony Ericsson, owned by Ericsson and Japan's Sony
Corp <6758.T>, posted a smaller than expected third-quarter
pretax loss, boosted by big cost cuts. [ID:nLG302722]
                                
 Across Europe, Britain's FTSE 100 <.FTSE> lost 0.6 percent,
and both Germany's DAX <.GDAXI> and France's CAC 40 <.FCHI>
dropped 1.5 percent.
                                
 Among other individual movers, tobacco maker Swedish Match
<SWMA.ST> surged 3.8 percent, with traders citing market talk of
bid interest from Philip Morris <PM.N>. Swedish Match declined
to comment. [ID:nLG168130]
                                
 Norwegian fertiliser producer Yara International <YAR.OL>
put on 2.7 perent, hitting a four-week high, as fertiliser
prices rose and brokers lifted ratings.
                                
 Volkswagen's preferred shares <VOWG_p.DE> fell 6.3 percent
after the carmaker <VOWG.DE> said it would seek a potential
further 10 billion euros from shareholders to secure its merger
with Porsche <PSHG_p.DE> and safeguard its financial stability.
                                
 French aerospace and defence group Safran <SAF.PA> fell 5.9
percent after it forecast a "challenging" 2010 but maintained
its guidance for 2009 as it posted flat third-quarter revenue.
 (Additional reporting by Atul Prakash and Blaise Robinson)