Europe stocks down for 3rd week, commodities weigh

                                
 * FTSEurofirst 300 index down 0.1 pct; falls for 3rd week
                                
 * Banks top gainers in thin trade, utilities leading losers
                                
 * Strategists see no decisive trend change next week
                                
 
                                
 By Peter Starck
FRANKFURT, July 3 (Reuters) - European stocks fell on
Friday, recording their third straight week of losses, led by
utilities, oil & gas and basic resources while banks and media
pulled in the opposite direction.
                                
 Volumes were thin in the absence of U.S. market participants
due to the extended Fourth of July weekend.
                                
 "With U.S. markets closed today for the Independence Day
holidays we have seen the major indexes lack direction," CMC
Markets said in a note.
                                
 "Major stock specific stories have also been hard to come by
today," CMC Markets added.
                                
 The pan-European FTSEurofirst 300 <.FTEU3> index closed 0.1
percent lower at 842.52 points. It lost 0.2 percent over the
week and has fallen 5.1 percent since its five-month high close
on June 11.
                                
 Utilities shaved most points off the index on Friday. EDF
<EDF.PA> fell 4.5 percent after Morgan Stanley downgraded its
rating to "equal weight" from "overweight". UBS and Citigroup
trimmed their price target on the EDF stock.
                                
 Also in the sector, E.ON <EONGn.DE> dropped 1.2 percent and
GDF Suez <GSZ.PA> lost 0.6 percent.
                                
 Weaker oil [ID:nSYD475678] and copper [ID:nL3514680] prices
weighed on oil & gas <.SXEP> and basic resources stocks <.SXPP>
amid renewed doubts about the outlook for economic growth
triggered by weaker-than-expected U.S. June jobs data on
Thursday. [ID:nN02549309]
                                
 Banks added the most points, with Barclays <BARC.L> up 2.8
percent, Banco Santander <SAN.MC> gaining 2.2 percent, BNP
Paribas <BNPP.PA> adding 2 percent, HSBC <HSBA.L> rising 1.7
percent and Deutsche Bank <DBKGn.DE> putting on 1.7 percent.
                                
 Media stocks advanced after Credit Suisse upgraded the
European sector to "overweight" from "underweight". The DJ Stoxx
media index <.SXMP> rose 0.5 percent.
                                
 Wolters Kluwer <WLSNc.AS> jumped 4.3 percent and Reed
Elsevier <REL.L> climbed 3.9 percent.
                                
 The DJ EuroSTOXX 50 index <.STOXX50E> of European blue chips
squeezed in a gain of 0.3 percent to 2,376.48 points.
                                
 BayernLB chartists saw support at 2,350 points, saying in a
technical analysis note that a break below that level would
spark a clear "sell" signal.
                                
 
                                
 WEEK AHEAD
                                
 Europe's top-300 index rose 35 percent between March 9 and
June 11, as improving sentiment indicators buoyed economic
recovery hopes, but has traded choppily in a narrow range since.
                                
 Strategists said that picture was unlikely to change much in
the week ahead.
                                
 "Next week brings too little quantitative or qualitative
data to give stock markets any decisive direction," said LBBW
investment analyst Michael Kohler.
                                
 Ad van Tiggelen, senior strategist at ING Investment
Management, said "the road ahead will be bumpy for risky assets"
such as equities, and LandesBank Berlin said stock market
fundamentals remained fragile.
                                
 "We don't want to rule out further setbacks. Nonetheless, we
assume that many investors will exploit an eventual temporary
weakness on the market and that as a result some liquidity which
has not yet been invested will flow back into the equity market
again," Raiffeisen Research said.
                                
 Stefan Scheurer, capital markets analyst at Allianz Global
Investors, spun on the same theme, saying investors with big
cash allocations might use phases of stock market weakness to
shift some money into equities.
                                
 Valuations could also lend some support. According to
consensus data compiled by Goldman Sachs, European shares trade
at on average 11.4 times 12-month forward earnings compared with
a 10-year average of around 13.5.
                                
 The U.S. corporate earnings reporting season gets under way
next week with aluminium group Alcoa <AA.N> on July 8 and oil
major Chevron <CVX.N> on July 9. [ID:nN02118833]
                                
 "Alcoa will be a signal. Its second-quarter numbers are
probably not good but a positive outlook could lift stock
markets," said Joerg Rahn, head of investment at Bankhaus
Marcard, Stein & Co.
                                
 London's FTSE 100 <.FTSE> index and the French CAC 40
<.FCHI> both edged up 0.1 percent on Friday while the German DAX
<.GDAXI> lost 0.2 percent and Zurich's SMI <.SSMI> fell 0.3
percent.
 (Additional reporting by Blaise Robinson in Paris and Joanne
Frearson in London; editing by Simon Jessop)