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Europe stocks drop as U.S. jobs data disappoints

Published 06/03/2011, 09:14 AM
Updated 06/03/2011, 09:16 AM
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* FTSEurofirst 300 down 1 pct, down 2.7 pct on week

* Euro STOXX 50 hits near 3-mth low, breaks below trendline

* Cyclical stocks such as mining among most hit

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

By Blaise Robinson

PARIS, June 3 (Reuters) - European stocks extended their losses on Friday as lower-than-expected U.S. monthly jobs data fanned worries over the outlook for the world's biggest economy, particularly hitting cyclical sectors such as mining.

At 1306 GMT, the FTSEurofirst 300 <.FTEU3> index of top European shares was down 1 percent at 1,104.69 points, a level not seen since late March. The index, which has lost 2.7 percent so far this week, is poised to record a fourth consecutive weekly loss.

"It was a very disappointing number. It seems to be in line with the overall deterioration in the U.S. macro fundamentals. Therefore, it should be negative for the equity market," said Paresh Upadhyaya, senior strategist at Bank of America-Merrill Lynch in New York.

The euro zone's blue chip Euro STOXX 50 <.STOXX50E> index was down 0.8 percent at 2,761.81 points, hitting a near three-month low and breaking below a 12-month upward trendline, sending a bearish signal.

Mining and oil shares took a beating along with commodity prices, with Rio Tinto down 1.8 percent and BP down 1.4 percent.

U.S. crude oil futures dropped to $98.37 a barrel, down more than $2, while the 19-commodity Reuters-Jefferies CRB index <.CRB> was down 0.7 percent.

The Euro STOXX 50 volatility index <.V2TX>, one of Europe's main fear gauges, rose nearly 5 percent to a one-week high, signalling a rise in investor aversion for risk.

(Reporting by Blaise Robinson. Additional reporting by New York markets team; Editing by David Cowell)

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