UPDATE 2-European shares ease after a three-day run; airlines zoom

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* Airline stocks rally after Ryanair lifts profit forecast
* Weak Christmas season undercuts British retailers
* German utility RWE up on prospects of 2 bln euros fund

(Updates to close)
By Medha Singh
Jan 10 (Reuters) - European shares fell modestly on Friday
on weaker than expected U.S. jobs growth, but travel and leisure
stocks gained after Ryanair raised its profit forecast and
Evolution Gaming Group announced an online U.S. casino deal.
The better than expected Christmas and New Year numbers
from Europe's largest low-cost operator RYA.I lifted its
shares to a two-year high and boosted budget carriers Easyjet
EZJ.L and Wizz Air WIZZ.L , which gained about 4% and 7%
each. Sweden's Evolution Gaming Group EVOG.ST jumped 6% after it
announced an agreement with U.S.-based Parx Casino to deliver
online services. The travel and leisure subsector .SXTP closed at its
highest in more than one and a half years.
The pan-European STOXX 600 .STOXX slipped in the final
minutes of trading after spending most of the session in
positive territory. It was the first decline in four days.
Slower-than-expected U.S. jobs growth in December pressured
Wall Street's advance. However, the pace of hiring remained more
than enough to keep the world's largest economy humming.
"The recent stock surge has ground to a halt after an
underwhelming U.S. jobs report," said Joshua Mahony, Senior
Market Analyst at IG.
"However, with the U.S.-China issue coming back into focus,
next week is likely to see a shift onto more positive topics."
The benchmark STOXX 600 had pulled back from record levels
at the start of the week on concerns about an all-out conflict
between United States and Iran.
However, indications from both sides that they would refrain
from further military action, as well as signals that a
U.S.-China trade deal will be inked next week helped markets
resume their record run.
British retailer B&M BMEB.L , suffered its sharpest fall in
more than a year after it said sales growth slowed in the key
Christmas quarter partly due to a tough market. Superdry SDRY.L also plunged about 7%, joining a spate of
reports this week that signalled UK retailers struggled for
sales growth in the run-up to Christmas.
The European retail index .SXRP ended Friday with its
steepest weekly drop in 14.
Utilities were the best performing European subsector on the
day, helped by shares of Germany's RWE RWEG.DE which hit a
more than 5 year high.
The firm could expect around 2 billion euros ($2.2 billion)
in compensation over government orders to turn off lignite power
stations, government and industry sources said.