UPDATE 2-Euro zone shares flat as EU recovery plan awaited; Ericsson soars

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* EU heads meet for talk, markets expect a deal soon
* Sweden's Ericsson surges as profit beats
* Banks, oil companies weigh as virus concerns lurk
* STOXX 600 posts third straight week of gains
* Auto stocks biggest boost; Daimler leads

(Updates to close)
By Sruthi Shankar and Susan Mathew
July 17 (Reuters) - Euro zone shares were little changed on
Friday as investors awaited the outcome of an European Union
summit where leaders are expected to hammer out details of a
750-billion-euro ($858 billion) recovery fund.
The euro zone STOXX index .STOXXE was flat after rallying
earlier this week to the highest since early June, mostly on
hopes an EU-wide fund to support pandemic-struck economies could
lift the bloc out of recession.
German Chancellor Angela Merkel warned "the differences are
still very, very big," as she arrived at the summit in Brussels.
Analysts believe markets could tolerate a few days or weeks
of delay, with opposition from the Netherlands and the threat of
a Hungarian veto weighing on chances of a deal on the EU's
2021-27 budget - envisaged at slightly above 1 trillion euros -
and the attached recovery fund. "(Merkel's) cautious comments suggested EU leaders might not
be able to reach a compromise," said Edward Moya, senior market
analyst at OANDA, New York. "Negotiations are expected to be
tough ... but optimism is high that a breakthrough will be made
at the two-day summit."
Meanwhile, the United States shattered its daily record for
coronavirus infections on Thursday, raising fears of a slower
recovery in the world's largest economy. The pan-European STOXX 600 index .STOXX closed up 0.2% as
gains in automakers .SXAP , commodity .SXPP and technology
stocks .SX8P of more than 1% outweighed losses in banks
.SX7P , energy .SXEP , travel and leisure stocks .SXTP .
For the week, the index was up 1.6% for its third straight
week of gains, as reports of progress in developing a COVID-19
vaccine supported cyclical stocks.
AstraZeneca AZN.L was the biggest boost on the pan-region
index, hitting a two-month high. Russia's wealth fund said it
was set to unveil a deal with the British drugmaker to
manufacture a COVID-19 vaccine being developed along with Oxford
University. Sweden's main stock index .OMXSPI scaled a near five-month
high as telecoms equipment maker Ericsson ERICb.ST surged
11.4% after smashing core profit expectations. Its shares posted
their best one-day percentage gain in more than two years.
Tobacco group Swedish Match AB SWMA.ST jumped 10.4% on
better-than-expected quarterly profit. Among auto stocks, Daimler DAIGn.DE rose 4.4% after
posting a smaller-than-expected operating loss in the second
quarter, while truck maker Volvo AB VOLVb.ST rose after
beating profit forecasts. ($1 = 0.8745 euros)