UPDATE 2-Earnings drive big swings in European stocks ahead of Fed

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news window)

* Investors await Fed, U.S. fiscal stimulus update

* Paris outperforms as Kering, Schneider earnings support

* Chemicals giant BASF slides as dividend under review
(Updates to market close)

By Sruthi Shankar

July 29 (Reuters) - Europe's main stocks benchmark closed
nearly flat on Wednesday, as investors waited to hear from the
U.S. Federal Reserve, but a flurry of earnings reports drove big
swings in individual stocks.

When the Fed concludes its monetary policy meeting later in
the day, investors are hoping that policymakers will reiterate
their accommodative stance to support financial markets as the
coronavirus pandemic takes its toll.

In a busy earnings day, the pan-European STOXX 600
closed down 0.1%, with healthcare and banks
dragging on the main index, while retailers jumped 1.4%.

Drugmaker GlaxoSmithKline fell 3.2% as it missed
second-quarter profit estimates after lower sales of its
existing vaccines, while lender Barclays dropped 6.1%
as it set aside a higher than expected 1.6 billion pounds ($2.1
billion) to cover a possible rise in loan losses due to the
pandemic.

The pair helped keep London's FTSE 100 nearly flat.

France's CAC 40 outperformed its continental peers
with a 0.6% rise after positive earnings updates from luxury
group Kering, electrical equipment group Schneider
Electric and consulting firm Capgemini.

"Markets have rallied aggressively, so what we're seeing is
companies coming with better numbers but not seeing an
additional uptick in markets," said Will James, deputy head of
European equities at Aberdeen Standard Investments.

"Companies that have managed earnings and sales, there have
been aggressive cost measures put in place."

Profits for STOXX 600 companies are expected to drop by a
record 59% in the second quarter, according to Refinitiv data.
But with much of the decline priced in, European stocks are on
course to end July with gains as investors bet on more stimulus.

Euro zone banks took a beating as Deutsche Bank
fell 2.5% after giving a slightly improved outlook
for the year, but chief executive Christian Sewing damped
speculation that the lender was eager to revive merger talks
with Commerzbank.

Spain's Santander slid 4.7% as it reported a record
net loss of 11.1 billion euros ($13 billion) in the second
quarter.

Chemicals giant BASF SE dropped 4.9% as it said
its dividend policy and the value of assets on its balance sheet
might be revised given uncertainty caused by the coronavirus
crisis.

UK retailer Next jumped 7.7% as it raised its profit
forecast after sales fell less than feared over the past three
months.
(Reporting by Sruthi Shankar in Bengaluru; Editing by Bernard
Orr and Uttaresh.V)