GLOBAL MARKETS: European Stocks Trading In Tight Range; Rally Over?

--Stocks nudge up and down in a tight range
--Banks, utilities rise on Goldman Sachs upgrade
--Eyes stay on EU summit; economic data weak



LONDON (Dow Jones)---European stocks nudged between small losses and gains as investors were confronted on the one hand by a lackluster European Union leaders summit and weak economic data, and on the other by a bullish call from Goldman Sachs on the banking sector following the European Central Bank's liquidity push.

At 1155 GMT, the benchmark Stoxx Europe 600 index was up 0.1% at 267.45. London's FTSE 100 index was down 0.1% at 5923.08, Paris's CAC 40 index was flat at 3501.45 and Frankfurt's DAX was down 0.1% at 6932.51.

"The fact that many benchmark equity markets have appeared to stall suggests that the liquidity-driven rally could be coming to an end," said analysts at Charles Stanley. "If that proves to be the case a strong argument exists for reversing the 'risk on' trade," they argued.

Although the main indexes were trading in tight ranges, banks and utilities stocks rose after Goldman Sachs raised both sectors to overweight from neutral. For banks, Goldman said despite the recent strong performance, there is more upside for the sector. "The [ECB's] long-term refinancing operation [LTRO] funding has improved liquidity and will help sector pre-provision profits, while banks still trade at a reasonable multiple of book value," said Goldman. The Stoxx Europe 600 banks index gained 0.6%.

For utilities, Goldman said the sector offers "the highest dividend yield alongside telecommunication [sector] but with a less stretched payout ratio." The Stoxx Europe 600 utilities index rose 0.6%.

Goldman also appeared to be more bullish on European equity markets on the whole, upgrading index targets for the Stoxx Europe 600 index and the FTSE 100 index on a three- and six-month basis.

Despite the brighter message by Goldman, investors demonstrated reluctance to build gains as the second day of the EU leaders summit resumed Friday.

Finance ministers delayed approval on just over half of Greece's second bailout, with reports suggesting that the full bailout for Greece may be approved by March 9.

By this date, the markets will learn what proportion of private-sector holders of Greek government bonds will voluntarily accept a halving in the face value of their holdings and a 75% cut in their present value. "We still do not know whether the tabled proposal will achieve sufficient volunteers to make the 90% target," warned Charles Stanley.

Economic data from Germany and Spain also curbed gains. German retail sales registered a surprising downward correction in January, down by 1.6% on the month, far below analysts' expectations of a 0.3% increase. This followed a 0.1% increase in December. Data from Spain showed the country continued to shed jobs at a fast pace in February, providing new evidence the local economy is sliding back into a deep contraction.

In foreign exchange markets, the euro was lower against the dollar. The single currency was last seen at $1.3236 against the U.S. dollar, from $1.3310 late Thursday in New York.

Crude oil futures jumped to a fresh nine-month high of $110.55 a barrel Thursday on reports that an explosion destroyed an oil pipeline in Saudi Arabia. At 1200 GMT, April Nymex crude oil futures were 75 cents lower at $108.09 a barrel, while April Brent oil futures were $1.27 lower at $124.93.

Elsewhere, spot gold was at $1,715.60 a troy ounce, down $5.20 from its New York settlement on Thursday, while the March bund contract was up 0.37 at 139.67.

Meanwhile, U.S. stocks are expected to open marginally lower Friday, after Thursday night's spike in oil prices saw U.S. markets pare some of their early gains. At 1150 GMT, the Dow Jones Industrial Average and S&P 500 front-month futures contracts were both down 0.2%.