great news: european shares fall early

Not.

LONDON, July 18 (Reuters) - European shares slipped in early
trade on Friday, as banks fell after disappointing results from
Merrill Lynch overnight and heavyweight oils lost ground
as crude traded well away from recent highs.

The FTSEurofirst 300 <.FTEU3> fell 0.7 percent to 1,137.83
points, but was on track to eke out a gain of just under 1
percent for the week thanks to a jump on Thursday.

Fortis was down 2.4 percent, Societe Generale
down 1.3 percent, UBS down 1.5 percent and
Royal Bank of Scotland down 1.2 percent.

On Wall Street, shares in JPMorgan jumped after its
results pleased investors but Merrill Lynch fell in
extended trade after a bigger-than-expected loss, sending mixed
signals about a banking sector battered by a credit crisis.

Citigroup is due to report later in the session.

Analysts said that despite Merrill, results from banks had
not been as bad as feared, and relief from surging crude prices
would also help equities.

"It's difficult to derive a general picture on the bank
results, but one could say they are more reassuring than not,"
said Thierry Lacraz, strategist at Swiss bank Pictet.

"The results from Citigroup will be key because it is
probably the most exposed to risky assets among the large
banks."

"We continue to be underweight on the banking sector, but it
will be a positive for financials, consumer stocks and the broad
market if the oil price goes to $120."

Oil traded at $131 a barrel, up on the day but a long way
off its peak above $147. Oil stocks BP , Royal Dutch
and Total were off 0.7-1.0 percent.