European stocks fall for third day on growth worries

* FTSEurofirst 300 down 0.9 pct, down 1.7 pct on the week

* Dana surges on KNOC hostile bid; BG up on bid talk

* BP falls for fifth day

* For up-to-the-minute market news, click on [STXNEWS/EU]

By Brian Gorman

LONDON, Aug 20 (BestGrowthStock) – European stocks fell at midday on
on Friday, and were on track to end lower for a second straight
week, as traders worried about the effects a slowdown in
economic growth will have on corporate earnings.

At 1048 GMT, the FTSEurofirst 300 (.FTEU3: ) index of top
European shares was down 0.9 percent at 1,027.42 points, falling
for the third straight day, and having hit its lowest level in a
month. The index is on track to record a 1.7 percent loss on the
week, and is in negative territory for 2010.

Weak U.S. economic data and high levels of debt in Europe
are worrying investors.
“The market is falling on concerns about GDP growth going
forward,” said Dean Tenerelli, fund manager at T Rowe Price.
“It’s about the effect of a U.S. slowdown and uncertainty and
how earnings will look in 2011, when austerity kicks in, though
in general, results have been good.”

Wall Street fell to its lowest close in nearly a month after
a report showed factory activity in the mid-Atlantic states
contracted in August for the first time since July 2009, and the
the Labor Department said first-time claims for jobless benefits
rose to a nine-month high.

In a broad market decline for European shares on Friday, the
heavyweight banking sector was a major drag on the index.

Banco Santander (SAN.MC: ), BBVA (BBVA.MC: ) and UBS (UBSN.VX: )
fell 1.3 to 1.4 percent. Insurers to fall included Allianz
(ALVG.DE: ), down 2.2 percent.

Crude prices (CLc1: ) fell 1 percent to $73.70, partly due to
a stronger dollar, hurting energy shares.

StatoilHydro (STL.OL: ) fell 1 percent. BP (BP.L: ) fell 2.2
percent, down for the fifth day. U.S. officials said on Thursday
the company likely won’t put the final plug in its blown-out
Gulf of Mexico oil well until September, while scientists said
the oil spill left a large plume of hydrocarbons in deep waters,
and those chemicals could be there for some time.

But it was the energy sector that provided the strongest
gains for individual companies.

Dana Petroleum (DNX.L: ) rose 5.9 percent, after state-run
Korea National Oil Corp (KNOC) made a hostile $2.9 billion cash
bid. [ID:nTOE67J00I]

BG Group (BG.L: ) rose 4.7 percent, as rumours resurfaced it
may attract a bid from Royal Dutch Shell (RDSa.L: ), which fell
1.1 percent.

Around Europe, UK’s FTSE 100 index (.FTSE: ), Germany’s DAX
index (.GDAXI: ) and France’s CAC 40 (.FCHI: ) fell between 0.7 and
1.1 percent.

The Thomson Reuters Peripheral Eurozone Countries Index
(.TRXFLDPIPU: ) was down 2.3 percent, with Spain’s benchmark IBEX
(.IBEX: ) down 1.7 percent.

HOLCIM FALLS

Holcim (HOLN.VX: ) fell 2.6 percent, adding to a 6.3 percent
fall in the previous session, when the world’s second-biggest
cement maker posted disappointing first-half earnings. Credit
Suisse cut its target price for the shares.

“Holcim has been another reason for the market falling,”
said T Rowe Price’s Tenerelli, “reminding people about the lack
of infrastructure spend”.

The Euro STOXX 50 (.STOXX50E: ), the euro zone’s blue chip
index, was down 1.1 percent at 2,646.90 points, piercing a key
support level, the 38.2 percent retracement of the index’s fall
from a high in April to a low in May. The index’s next major
support level is 2,584.75 points, the 23.6 percent Fibonacci
retracement.

“The latest data out of the U.S. sparked a flight to quality
by reviving fears of a double-dip recession, with investors
seeking refuge into safer government debt,” Louis Capital
analyst Bertrand Michaud said.
(Additional reporting by Blaise Robinson; Editing by Jon
Loades-Carter)

European stocks fall for third day on growth worries