STOCKS NEWS EUROPE-Morrisons Xmas sales drop fails to spook

Shares in WM Morrison fall 0.5 percent in heavyvolume after the supermarket chain's Christmas trading update,although the move is in line with the FTSE 100 after thefirm's weak sales prove no worse than market expectations. By 1519 GMT, the stock -- a top short-selling target in theweeks before the update -- has traded more than twice its 90-daydaily average volume against just 50 percent for the broaderindex. "I think to be honest there was a degree of fear going intotoday's announcement from Morrisons that there may actually havebeen a full-blown profit-warning," Clive Black, analyst at ShoreCapital Stockbrokers, says. "The fact that that hasn't been the case is a modest sourceof relief... That said, it was a very poor trading statement." Shore Capital cuts its pretax profit forecasts for Morrisonsby 5.8 percent for 2012/2013, and by 6.5 percent for 2013/2014. Morrisons shares have dropped 13.3 percent since a peak inlate September, against a fall of 4.5 percent from J Sainsbury, and near 2 percent gains from Tesco and Marks& Spencer over the period, all of whom report this week. For a graphic showing UK retailers' share price performancesclick on: http://link.reuters.com/mat94t For more on the Morrisons update, click: For more on the short-selling of Morrisons, click: Reuters messagingrm://tricia.wright1.thomsonreuters.com@reuters.net