* FTSEurofirst 300 dips 0.1 pct, up 0.5 pct on the week
* Better-than-expected U.S. data help boost sentiment
* Insurers slump on Munich Re's profit warning
By Blaise Robinson
PARIS, July 25 (Reuters) - European stocks ended slightly
lower on Friday, after a flurry of better-than-expected U.S.
economic data failed to eclipse a profit warning by Munich Re
<MUVGn.DE> that knocked insurers lower.
On the upside, Danone <DANO.PA> surged 7.7 percent after the
food and beverage group lifted its 2008 operating margin target
and confirmed 2008 sales and profit growth outlook.
UBS <UBSN.VX> sank 6.1 percent on the back of news that New
York State has filed a lawsuit accusing the bank of deceptively
selling auction-rate securities as cash equivalents.
The FTSEurofirst 300 <> index of top European shares
ended 0.1 percent lower at 1,169.59 points, after falling by
more than 1 percent during the session.
The index, which is down 22 percent so far in 2008, has
gained 0.5 percent during the week.
Late in the session, better-than-expected U.S. data
reassured investors on the outlook of the world's biggest
economy, and spurred a rally on Wall Street.
U.S. consumer sentiment recovered unexpectedly in July,
sales of newly built single-family homes were stronger than
expected in June, and new orders for long-lasting U.S.
manufactured goods rose surprisingly in June on demand for
metals, machinery, electrical equipment, and military needs,
even though transportation orders were weak.
"Core durable goods shipments increased for the fourth
consecutive month, signalling resilient investment in equipment
despite a difficult context," Jean-Marc Lucas, economist at BNP
Paribas, wrote in a note.
Among the biggest losers, the DJ Stoxx European insurance
index <.SXIP> shed 4.3 percent. Munich Re slashed its forecasts
for 2008 profit, blaming turbulent equity markets, and Hannover
Re <HNRGn.DE> said it will be difficult to reach full-year
targets if capital markets do not calm down.
"This is bad news. It shows insurers can't be trusted and
that even now they don't have a clear idea what they will make
this year," said Michael Huttner, insurance analyst at JP
Morgan.
Munich Re tumbled 7.3 percent, Hannover Re shed 7.2 percent,
while AXA <AXAF.PA> fell 4.8 percent, Aegon <AEGN.AS> lost 6
percent and Allianz <ALVG.DE> dropped 4.6 percent.
Other sectors were also hit by profit warnings. Belgacom
<BCOM.BR> shed 6.9 percent after cutting its revenue forecast
for 2008, citing pressure on mobile call prices and a gloomy
economic environment.
"There are more profit warnings coming out and they appear
to become more severe," said portfolio strategist Andreas
Huerkamp at Commerzbank in Frankfurt, adding that he expected
earnings to continue to deteriorate in the coming two quarters.
"It looks like especially June and July came in much worse
than many management boards expected," he said.
On the upside, energy heavyweights gained ground ahead of
their earnings reports due next week and which are expected to
show record profits thanks to high oil prices.
BP <BP.L> rose 1 percent, Royal Dutch Shell <RDSa.L> gained
0.4 percent and Total <TOTF.PA> added 1.5 percent.
EDF <EDF.PA> rose 5.6 percent as investors saw the potential
acquisition of British Energy <BGY.L> as positive. A source
briefed on the matter told Reuters that nuclear operator British
Energy agreed to be taken over by the French utility
for about 775 pence a share.
Around Europe, Germany's DAX index <> lost 0.06
percent, UK's FTSE 100 index <> fell 0.2 percent and
France's CAC 40 <> gained 0.7 percent. So far this year,
the DAX has lost 20 percent, the FTSE 100 has lost 17 percent
and the CAC 40 has dropped 22 percent.
(Additional reporting by Simon Challis and Patrizia Kokot in
London; Editing by David Cowell)
