* FTSEurofirst 300 down 0.3 pct, Euro STOXX 50 off 0.5 pct
* Wall Street suffers steep sell-off Monday on poor earnings
* Celesio slides after takeover fails
By Tricia Wright
LONDON, Jan 14 (Reuters) - European shares fell on Tuesday as investors turned cautious after a string of disappointing earnings and outlook statements on Wall Street.
Market concerns have been mounting as a strong rally has left stocks looking expensive. With U.S. and European equities trading above their long-run averages, the worry is that further market gains will be limited until earnings start to improve.
The STOXX Europe 600 rose more than 17 percent last year, while the S&P 500 surged about 30 percent.
Goldman Sachs said recently it reckons the S&P "has a 67 percent probability of a 10 percent drawdown during 2014". It downgraded the U.S. equity market to "underweight" over three months, but remained "overweight" Europe.
U.S. stocks fell sharply on Monday after a number of mid-sized companies including SodaStream, Lululemon Athletica, Express Inc and Aaron's posted weak earnings or forecasts.
This served as negative news for investors poring over earnings for clues as to the likely strength of the European fourth-quarter corporate reporting season, which will gather pace in the last week of the month.
"It is too early to get too worried but the warning signals are increasing," said Lex van Dam, hedge fund manager at Hampstead Capital.
At 1218 GMT, the FTSEurofirst 300 index of top European shares was down 0.3 percent at 1,319.95 points, while the euro zone's blue-chip Euro STOXX 50 index was off 0.5 percent at 3,095.79, both retreating from recent five-year highs.
Ashish Misra, head of investment policy at Lloyds Bank Private Banking, however, noted that guidance in the most recent European earnings season for the full year and for 2014 hardly pointed to "storm clouds on the horizon".
"I'd say no fireworks but no explosions either," he said. "Keep some powder dry and put it to work as markets go a little bit lower because I think that is going to prove to be a very good buying opportunity."
Misra said that while the STOXX Europe 600, which trades on 13.7 times expected earnings over the next 12 months, according to Thomson Reuters Datastream, is not that far above its 10-year average P/E at 12 times, "it is not cheap".
He reckoned that a 5 percent drop on the index, which he said would bring the P/E down to around 13 times, would be a good point at which to get back into the market.
German drugs distributor Celesio was a big faller, shedding 5.3 percent, after suitor McKesson failed to garner enough shares to carry through its takeover bid.
Trade in Celesio shares rocketed, with the issue logging four times its 90-day average volume around mid-session.