* FTSEurofirst 300 falls 0.4 pct, hits one-week low
* Euro STOXX 50 down 0.5 pct, but bullish 'golden cross'
* Resource-related stocks hit as QE doubts boost dollar
* SAP, Michelin, Heineken drop as results fail to impress
* For up-to-the-minute market news, click on []
By Blaise Robinson
PARIS, Oct 27 (Reuters) - European stocks fell in early
trade on Wednesday, as mounting doubts about how aggressive the
Federal Reserve will be in pumping more money into the system
rattled investors and boosted the dollar.
But the retreat was limited as the Euro STOXX 50
<>, the euro zone's blue-chip index, ran into a strong
support level and sent a bullish signal as the index's 50-day
moving average crossed above its 200-day moving average, known
as a golden cross.
That upward momentum indicator last occurred in June 2009,
and the benchmark index climbed more than 20 percent in the
following four months.
At 0835 GMT, the FTSEurofirst 300 <> index of top
European shares was down 0.4 percent at 1,085.70 points. The
Euro STOXX 50 fell 0.5 percent to 2,841.30 points, after testing
a key support level at 2,837.89, which represents the 38.2
percent Fibonacci retracement of the index's fall from a 2007
high to a 2009 low.
"Although we might get a small pullback in the short term,
indexes have clearly entered into a bullish phase by breaking
out above the summer range, with the DAX recently hitting its
highest of the year," said Vincent Ganne, technical analyst at
IG Markets, in Paris.
The Wall Street Journal reported on Wednesday that the Fed
is likely next week to unveil a programme of U.S. Treasury bond
purchases worth a few hundred billion dollars over several
months. In a Reuters survey earlier this month, U.S. primary
dealers' projections for the size of the Fed's expected
quantitative easing had ranged from $500 billion to $1.5
trillion. []
"If the next round of quantitative easing is indeed lower
than what people have been expected, it's going to be negative
for equities, at least for U.S. stocks, so we could take a
breather after the recent rally," said Pierre-Yves Gauthier,
head of research at Alphavalue in Paris.
"But the downside risk is limited by the fact that stock
valuation levels are attractive and companies have been
releasing strong figures overall. The further we get into the
earnings season in Europe, the less people will focus on the
dollar swings."
Mining shares dropped along with metal prices, hit by the
dollar's rise, with both Xstrata <XTA.L> and Rio Tinto <RIO.L>
down 2.1 percent.
German business software maker SAP <SAPG.DE> fell 3.4
percent as investors booked recent strong gains after the
company's results and outlook failed to impress.
French tyre maker Michelin <MICP.PA> dropped 1.9 percent as
worries over raw material costs for 2011 eclipsed good quarterly
results.
Heineken NV <HEIN.AS> tumbled 3.7 percent as the world's
third-largest brewer reported weaker-than-expected
third-quarter sales.
Bucking the trend, Nordea <NDA.ST> rose 3.3 percent after
the biggest Nordic bank by value posted third-quarter earnings
above all forecasts, and Deutsche Bank AG <DBKGn.DE> gained 2
percent after reporting resilient profit from investment banking
in the third quarter.
(Reporting by Blaise Robinson; Editing by Erica Billingham)
