European shares fall for 3rd day; focus on US GDP

                                
 * FTSEurofirst 300 down 0.3 pct; falls for 3rd session
                                
 * Investors await U.S. GDP numbers for direction
                                
 * Construction and materials, banks among top losers
                                
 * For up-to-the-minute market news, click on [STXNEWS/EU]

                                
 By Atul Prakash
                                
 LONDON, July 30 (Reuters) - European shares slipped for a
third straight session on Friday, with construction shares among
top losers, as concerns over U.S. economic growth and downbeat
comments from a Federal Reserve official hurt market sentiment.
                                
 At 0818 GMT, the FTSEurofirst 300 <.FTEU3> index of top
European shares was down 0.3 percent at 1,043.81 points after
rising to a high of 1,048.49 earlier in the session. But the
index was on track to record its best monthly gain since March.
                                
 Construction and materials shares were the worst hit on
concerns about a slowdown in economic recovery. The sector index
<.SXOP> fell 1.1 percent, while Ferrovial <FER1.MC>, Holcim
<HOLN.VX> and Saint-Gobain <SGOB.PA> dropped 0.8 to 1.6 percent.
                                
 France's Lafarge <LAFP.PA>, the world's largest cement
maker, fell 4 percent as it cut its 2010 outlook estimate for
global cement demand in its markets.
                                
 "What I see in this market is a fight between macro-economic
data and better-than-expected company results," said Koen De
Leus, economist at KBC Securities. "It appears the U.S. Federal
Reserve is preparing the markets for worst-than-expected data."
                                
 Investors stayed cautious ahead of a government report,
which is expected to show at 1230 GMT that U.S. economic growth
likely slowed in the second quarter.
                                
 St. Louis Federal Reserve bank President James Bullard's
comments on Thursday that he is worried about the risks the U.S.
might fall into a Japan-style quagmire of falling prices and
investment also dampened mood.
                                
 In Britain, consumer confidence fell for the fifth month in
a row in July to its lowest in almost a year.
                                
 "This type of news flow will continue to depress
expectations over the pace of economic recovery," said Gerard
Lane, analyst at Shore Capital.
                                
 "This may translate through to knocking back the recovery of
sterling and in addition adds further support to our thesis of a
poor outlook for the UK consumer."
                                
 Strong company results, however, offered some support to the
market and limited losses. Total <TOTF.PA> rose 1.9 percent as
it said second-quarter underlying net profit jumped 72 percent,
thanks to higher oil prices. The French oil major continued a
trend across the sector by reporting strong production after
years of sluggish growth. [ID:nLDE66T05G]
                                
 Telecom equipment maker Alcatel-Lucent <ALUA.PA> jumped 6.7
percent after the company said it would reach its annual profit
targets despite an industry-wide chip shortage. [ID:nLDE66K1FB]
                                
 Across Europe, the FTSE 100 <.FTSE>, Germany's DAX <.GDAXI>
and France's CAC 40 <.FCHI> fell 0.4 to 0.5 percent.
                                
 
                                
 FACES RESISTANCE
                                
 Analysts said the market's failure to break key levels could
trigger a technical sell-off in the coming sessions.
                                
 "We are at a point where the technical picture has improved
considerably, but the problem is that the S&P 500 index doesn't
want to break through the 200-day moving average," De Leus said.
                                
 "It's a worrying sign and if it stays like this for too
long, then we can expect to go down again."
                                
 On Thursday, the Standard & Poor's 500 Index <.SPX> dropped
0.4 percent to 1,101.54 points -- slightly below its 200-day
moving average of 1,114.25. The index tried to convincingly
break the average in several sessions this week, but failed.
                                
 The Euro STOXX 50 <.STOXX50E>, the euro zone's blue chip
index, fell 0.7 percent to 2,734.24 points. This week, the index
faced strong resistance at around 2,806 points -- its 61.8
percent Fibonacci retracement of a fall from an April high to a
low in May. It now hovers around the 50 percent retracement.
                                
 Banks also lost ground, with the STOXX Europe 600 banking
index <.SX7P> down 0.4 percent. Barclays <BARC.L>, BNP Paribas
<BNPP.PA> and Royal Bank of Scotland <RBS.L> fell 1-1.5 percent.
                                
 British Airways <BAY.L> still expects to break even in the
full year, despite reporting wider first quarter losses due to
the impact of volcanic ash and strike-related disruption. Its
shares rose 3.1 percent.
  (Editing by Mike Nesbit)