* FTSEurofirst 300 up 0.4 pct, reverses early dip
* Index up for 10th day in a row, up 12.3 pct over 2 weeks
* Germany's Ifo, euro zone PMI data boost optimism
* For up-to-the-minute market news, click on []
By Blaise Robinson
PARIS, July 24 (Reuters) - European stocks reversed early
losses and rose on Friday, up for a tenth session in a row, as
forecast-beating European macro data eclipsed poor results from
Microsoft <MSFT.O> and gloomy comments from Ericsson <ERICb.ST>.
Banks were among the biggest gainers, with BNP Paribas
<BNPP.PA> up 2 percent, Deutsche Bank <DBKGn.DE> up 1.8 percent
and Royal Bank of Scotland <RBS.L> up 2.8 percent.
At 0905 GMT, the FTSEurofirst 300 <> index of top
European shares was up 0.4 percent at 911.77 points, after
rising to as high as 915.34 points, its highest level since
mid-November. The index has soared 12 percent over the past two
weeks -- its longest winning run since December 2006.
Optimism about a burgeoning economic recovery and
better-than-feared company profits has propelled the
FTSEurofirst 300 up 41 percent from March's record low, and the
index is now up 9.6 percent on the year, after plummeting 45
percent in 2008.
"The rally over the past two weeks has been very fast and
the market is now dangerously overbought. We're due for a pause,
which would be healthy if we want to keep the upside trend
alive," said Alexandre Le Drogoff, technical analyst at Aurel
BGC.
"But I'm still cautious on the longer term. We haven't seen
yet a reversal of the downtrend started two years ago."
After an early dip, stocks turned positive when data showed
Ifo's closely-watched German business climate index rose to 87.3
in July, higher than the Reuters consensus for a smaller rise to
86.5. []
Euro zone provisional purchasing managers' surveys also
showed the services and manufacturing sectors contracted much
less sharply than expected in July but firms continued to cut
jobs in a bid to reduce costs. []
The gains in Europe on Friday followed a rally on Wall
Street, where upbeat earnings and improving housing data helped
the S&P 500 punch through a critical technical resistance level
at 960, triggering a rally that lifted the benchmark index to
979.42 -- its highest intraday level in eight months.
"It was a very strong breakout for the S&P 500, and volumes
were above average," said Edmund Shing, strategist at BNP
Paribas.
"So we might not see a long bout of profit taking, because
the danger is that investors have been caught short and have not
been investing, and now they might start to panic."
Around Europe, UK's FTSE 100 index <> gained 0.7
percent, Germany's DAX index <> rose 0.7 percent, and
France's CAC 40 <> added 0.5 percent.
Ericsson <ERICb.ST> dropped 6 percent after the telecom gear
maker posted higher-than-expected core earnings but said the
impact of the economic downturn on its key mobile networks
market had become more notable.
Vodafone <VOD.L> gained 2.5 percent after the world's
largest mobile phone company by revenues reported in-line sales
and reiterated its outlook.
Saint-Gobain <SGOB.PA> surged 5.8 percent after the French
building materials group said it sees signs that the
construction market has reached the low point of the economic
recession and would start to pick up.
Merck KGaA <MRCG.DE> tumbled 12 percent after the German
drugmaker posted weaker-than-expected quarterly results and on a
negative opinion by a European regulatory body regarding the use
of its cancer drug Erbitux.
(Reporting by Blaise Robinson; editing by Simon Jessop)
