UPDATE 2-European shares settle below record highs

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* Euro zone GDP slows in Q4, but employment beats consensus
* FTSE 100 lags after negative updates from AstraZeneca, RBS
* STOXX 600 posts second consecutive weekly gain

(Updates to close)
By Sruthi Shankar
Feb 14 (Reuters) - A handful of negative company updates
from Britain and France knocked European shares off record
highs hit earlier in the session on Friday, while investors
grappled with the impact of the coronavirus outbreak on global
growth.
The pan-European STOXX 600 .STOXX closed down 0.1% after
notching up a new high of 432.26 points in early afternoon
trading.
London's FTSE 100 .FTSE underperformed its European peers
with a 0.6% drop, as drugmaker AstraZeneca AZN.L forecast a
possible slowdown in revenue growth this year, assuming a hit
from China's coronavirus epidemic. France's CAC 40 .FCHI fell 0.4% as Barclays downgraded
several consumer stocks, saying the outbreak will have major
impact on Chinese consumption.
Cosmetics group L'Oreal OREP.PA as well as spirits makers
Remy Cointreau SA RCOP.PA and Pernod Ricard PERP.PA fell
between 0.5% and 1.2% after the rating cut. "The weekend provides plenty of scope for unpleasant
surprises, hence the cautious attitude displayed by risk assets
on most Fridays in the year so far," Chris Beauchamp, chief
market analyst at IG, wrote in a client note.
"But it has been yet another week where downside has failed
to materialise in any real fashion, leaving investors with
nothing to do but keep buying into the rally."
Despite the uncertainties, the main STOXX 600 recorded its
second consecutive weekly gain as investors clung to hopes that
the damage to the global economy from China's coronavirus
outbreak will be short-lived.
The World Health Organization said a large jump in new
coronavirus cases seen on Thursday was due to a change in
classification methods, and did not necessarily reflect the "tip
of an iceberg" of a wider epidemic. That helped investors to take a batch of downbeat data in
stride. Figures showed euro zone economic growth slowed as
expected in the fourth quarter, but employment growth picked up
more than expected. Other data showed the German economy stagnated in the same
period due to weaker private consumption and state spending,
raising the risk of a recession in an economy hit by weak
manufacturing activity. German stocks .GDAXI ended flat, but recorded a weekly
gain of 1.7%.
Real estate .SX86P and utilities .SX6P were the best
performing European sectors for the day, rising about 1.5% each.
Utilities were boosted by France's Electricite de France SA
EDF.PA , which topped the STOXX 600 after its annual core
earnings beat expectations. Meanwhile, French carmaker Renault SA RENA.PA fell 0.9%
after posting its first annual loss in 10 years. German payments company Wirecard WDIG.DE dropped 3.5% even
as it reported strong quarterly results, in-line with analyst
expectations. However, there was no update on an outside audit to address
Financial Times allegations of fraud and false accounting that
have dogged the Munich-based company. Wirecard has said the
allegations are unfounded. Royal Bank of Scotland's RBS.L slumped 6.8% after flagging
a new strategy to cut back its investment bank and rename the
company. UK's exporter-heavy index finished the week with a 0.8%
drop, hit by a pound that has firmed on expectations the new
British finance minister would unveil a more expansionary budget
next month. GBP/