* FTSEurofirst 300 falls 0.8 percent, down from 1-yr high
* BofA, GE results weigh on sentiment
By Dominic Lau
LONDON, Oct 16 (Reuters) - Disappointing third-quarter results from Bank of America and General Electric and weak U.S. consumer sentiment survey dragged European shares lower on Friday from a one-year high.
The FTSEurofirst 300 index closed 0.8 percent lower at 1,009.62 points after trading as high as 1,026.43 in the morning session -- its highest level since Oct. 7, 2008.
But results from Bank of America and U.S. conglomerate General Electric countered the positive momentum created by IBM and Google's earnings figures overnight.
"The bar has been raised. You could have effectively announced poor results in Q2 and then the stock would be up 5 percent," said Robert Quinn, European strategist at Standard & Poor's equity research in London.
Financials were the top losers in Europe, with Deutsche Bank , Commerzbank, BNP Paribas, Societe Generale and HSBC falling 2 to 3 percent.
Bank of America posted a wider than expected third-quarter loss as an improvement in its Merrill Lynch investment banking unit failed to offset consumer credit woes, while General Electric's revenue missed market expectations.
A Reuters/University of Michigan Surveys of Consumers report also weighed on the market. It showed U.S. consumer sentiment fell unexpectedly in October on persistent worries that the "dismal" state of personal finances would not recover quickly from the worst recession in decades.
"Final demand within the U.S. economy and within the European economy hasn't really caught up with expectations pricing in the equity market," Quinn said.
The index, which slumped 45 percent last year, is up 21.4 percent in 2009 and has surged more than 56 percent since hitting a record low in early March, driven by low valuations and signs of improving economic data.
But the sharp rally has raised questions whether it has gone too far, too fast, while the recovery remains patchy.
"We're still in a upside trend on the market, but it won't last unless we see companies' revenues starting to rise again. And it's not the case for now," said Jacques Henry, analyst at Louis Capital Markets, in Paris.
Concerns over corporate earnings and the strength of the economic recovery also took the shine off mining shares as well as raw material prices.
BHP Billiton, Rio Tinto, Anglo American, Xstrata, Vedanta Resources and Eurasian Natural Resources lost between 0.4 and 2.4 percent.
SLICK OILS, SWEDISH MATCH UP
Heavyweight oil producers held on to earlier gains, despite crude prices reversing to trade down in the afternoon. BP, Royal Dutch Shell and Total advanced 0.6-1.7 percent.
Sweden's Ericsson gained 2 percent after mobile phone maker Sony Ericsson, owned by Ericsson and Japan's Sony Corp, posted a smaller than expected third-quarter pretax loss, boosted by big cost cuts.
Across Europe, Britain's FTSE 100 lost 0.6 percent, and both Germany's DAX and France's CAC 40 dropped 1.5 percent.
Among other individual movers, tobacco maker Swedish Match surged 3.8 percent, with traders citing market talk of bid interest from Philip Morris. Swedish Match declined to comment.
Norwegian fertiliser producer Yara International put on 2.7 perent, hitting a four-week high, as fertiliser prices rose and brokers lifted ratings.
Volkswagen's preferred shares fell 6.3 percent after the carmaker said it would seek a potential further 10 billion euros from shareholders to secure its merger with Porsche and safeguard its financial stability. French aerospace and defence group Safran fell 5.9 percent after it forecast a "challenging" 2010 but maintained its guidance for 2009 as it posted flat third-quarter revenue. (Additional reporting by Atul Prakash and Blaise Robinson)