Wall Street lifts European shares despite earnings drag

* FTSEurofirst 300 rises 0.1 percent

* Wall Street bounces after Caterpillar (NYSE: CAT - news) results

* Michelin (Paris: FR0000121261 - news) and Unilever (NYSE: UL - news) fall, flagging weak EM demand

* Strong PMIs from Germany and euro zone support index (Updates with Wall Street open, new quote)

By Alistair Smout

EDINBURGH, Oct 23 (Reuters) - European stocks edged higher in choppy trade on Thursday, buoyed by strength on Wall Street but hindered by weak corporate results from companies including French tyre-maker Michelin.

The pan-European FTSEurofirst 300 also benefited from better-than-expected euro zone business activity data, although it still spent most of the day in negative territory until U.S. stock futures turned higher.

The U.S. S&P 500 gained around 1 percent after strong earnings from the likes of Caterpillar, which reported stronger-than-expected quarterly profit and boosted its 2014 profit outlook.

The rise helped European stocks to erase losses, with the FTSEurofirst 300 trading 0.1 percent higher at 1,310.34 at 1340 GMT.

However, European indexes badly underperformed U.S. counterparts, hindered by a number of poor earnings reports.

Michelin and Unilever cited poor demand from emerging markets as the former cut its full-year revenue goal and the latter reported weaker-than-expected quarterly sales. Michelin dropped 5.6 percent, while Unilever's London-listed shares were down 2.4 percent.

"I think there still is going to be earnings growth, but there is some evidence that international operations are weak," said Jasper Lawler, market analyst at CMC Markets.

"Euro zone economies still aren't convincingly strong, and emerging markets aren't providing much respite either."

Britain's biggest grocer Tesco (Xetra: 852647 - news) dropped 7.7 percent, while French advertising group Publicis (Paris: FR0000130577 - news) also fell sharply after reporting disappointing numbers.

Of the STOXX Europe 600 companies to report results so far this quarter, 36 percent of companies have missed expectations, compared to 29 percent on Wall Street's S&P 500 .

Amid growing concerns over the strength in economic growth worldwide, Paris-based Carmignac, which has 49 billion euros ($62.1 billion) in assets under management, recently slashed its exposure to equities worldwide to 12 percent from 42 percent at the end of last month.

The end of easy monetary policy from the U.S. Federal Reserve will put equities under pressure, Frederic Leroux, global fund manager at Carmignac, said.

"Now (NYSE: DNOW - news) that the Fed is putting an end to quantitative easing, the time for investor complacency is over," Leroux said.

Among a handful of outperformers, Danish industrial enzymes maker Novozymes (Other OTC: NVZMF - news) reported third-quarter earnings above expectations and raised its full-year outlook for operating profit growth. Its shares rose 7.4 percent.

Europe bourses in 2014: http://link.reuters.com/pap87v

Asset performance in 2014: http://link.reuters.com/gap87v

Today's European research round-up (Additional reporting by Blaise Robinson in Paris; Editing by Alison Williams)