European shares close lower; banks, oils weigh

                                
 * FTSEurofirst 300 index closes down 1.1 pct
                                
 * Banks, oil shares weigh
                                
 * Ericsson results disappoint

                                
 By Joanne Frearson
                                
 LONDON, Oct 22 (Reuters) - European shares closed lower on
Thursday, with banks and oil stocks the major losers and
Ericsson <ERICb.ST> falling after disappointing results.
                                
 The pan-European FTSEurofirst 300 <.FTEU3> index of top
shares closed down 1.1 percent at 1,014.72 points. The benchmark
index is still up 57 percent from its lifetime low on March 9,
but down 38 percent since reaching its mid-2007 peak.
                                
 "These markets are due for a bout of consolidation, if
anyone is looking to book some profits this is as good as time
as any," said Mike Lenhoff, strategist at Brewin Dolphin.
                                
 "We might get some rough numbers, but if you look at the
whole sweep of newsflow which is being reported then I do not
think anyone can say that what we have seen so far has been
bad," he said.
                                
 Banks featured among the biggest losers. Credit Suisse
<CSGN.VX> was down 3.5 percent after third-quarter earnings,
with analysts pointing to a 16 percent fall in investment
banking revenues from the previous quarter and lower pretax
profits and margins at the private banking unit.
                                
 HSBC <HSBA.L>, Banco Santander <SAN.MC> and BNP Paribas
<BNPP.PA> were down 1.1 to 2 percent.
                                
 Oil stocks fell as crude <CLc1> slipped back 1.1 percent. BG
Group <BG.L>, BP <BP.L>, Royal Dutch Shell <RDSa.L> and Total
<TOTF.PA> were 0.8 to 1.5 percent lower.
                                
 Mobile network gear maker Ericsson lost 6.2 percent after it
reported weaker-than-expected quarterly core earnings and a drop
in sales, hit by the global economic downturn. [ID:nLM420454]
                                
 
                                
 CHEMICAL STOCKS FALL
                                
 Chemical stocks were under pressure. Air Liquide <AIRP.PA>
was 2.7 percent lower after sales at the French industrial gases
group fell in the third quarter. [ID:nLL242297]
                                
 "Those people who believe that we're on our way to the moon
delude themselves. This is a long hard struggle. We've been
waiting for weeks for some kind of a pullback after the rally,"
said David Buik, senior partner at BGC Partners.
                                
 Defensive stocks were in favour, with food producer Nestle
<NESN.VX> up 1.4 percent.
                                
 Vodafone <VOD.L> gained 3.4 percent with traders pointing to
a positive read-across from results by U.S. telecoms peer AT&T
<T.N>.
                                
 AT&T reported stronger-than-expected third-quarter profit as
the popular Apple iPhone helped it land a record number of new
wireless customers for the period.
                                
 Looking at economic news, the number of U.S. workers filing
new claims for unemployment benefits rose more than expected
last week, data showed, indicating the labour market remains
fragile despite signs of economic revival. [ID:nN22534549]
                                
 Meanwhile, U.S. home prices fell by a seasonally adjusted
0.3 percent in August, bringing the 12-month decline to 3.6
percent, the Federal Housing Finance Agency said. [ID:nN22542841]
                                
 Across Europe, the FTSE 100 <.FTSE> index was down 1
percent, Germany's DAX <.GDAXI> fell 1.2 percent and France's
CAC 40 <.FCHI> was 1.4 percent lower.
 (Additional reporting by Brian Gorman; Editing by Rupert
Winchester)