UPDATE 2-European shares end lower on U.S. virus woes; banks drag

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* Focus turns to fresh record rise in U.S. virus cases
* Lagarde says euro zone "probably past" the worst
* Adidas slips after Nike posts surprise loss

(Updates to market close)
By Sruthi Shankar
June 26 (Reuters) - European stocks closed lower on Friday
as losses on Wall Street following a surge in U.S. coronavirus
cases added to worries over the pace of the global economic
recovery.
The pan-European STOXX 600 index .STOXX fell 0.4% after
hovering in positive territory earlier in the session.
Banks .SX7P were the biggest decliners, down 2.2%, while
their transatlantic peers took a hit from the U.S. Federal
Reserve's move to cap shareholder payouts.
Financial markets this week have swung between fears that a
resurgence in COVID-19 cases could trigger fresh restrictions
and optimism over improving economic data in Europe as many
countries relax lockdown measures.
European Central Bank President Christine Lagarde said the
euro zone is "probably past" the worst of the economic crisis
caused by the pandemic, but the recovery will be uneven.
However, the STOXX 600 lost some steam heading into the
close as investors focused on a record one-day rise in U.S.
COVID-19 cases. "Friday's session was, all told, a bit of a mess, one that
pretty accurately captured the conflict between investors'
wishes and reality," said Connor Campbell, a financial analyst
at SpreadEx.
The STOXX 600 recorded a near 2% decline for the week, with
travel and leisure stocks .SXTP lagging the most.
Air France-KLM AIRF.PA closed 3.4% lower after rising
earlier on news the Dutch government will provide 3.4 billion
euros ($3.8 billion) in support to its Dutch arm. UK stocks .FTSE outperformed their European peers with a
0.2% rise as the British government took more steps to relax the
coronavirus lockdown. .L
Britain's biggest retailer Tesco TSCO.L rose 1.9% after it
reported an 8.7% increase in underlying UK sales in its first
quarter, boosted by the coronavirus lockdown. AMS AMS.VI rose 1.5% after the Austria-based semiconductor
company rejected media allegations of market manipulation during
its takeover of Osram OSRn.DE . Sweden's H&M HMb.ST fell 5.5% after the world's
second-biggest fashion retailer saw a slightly deeper than
expected loss in the second quarter. Adidas ADSGn.DE slipped 2.1% after Nike Inc NKE.N
reported an unexpected quarterly loss.