European stocks fall for third day in broad retreat

PARIS, May 22 (Reuters) - European stocks dropped in early trade on Thursday in a broad retreat, falling for the third session in a row, on inflation fears after a gloomy outlook by the Federal Reserve and a surge in oil prices.

At 0715 GMT, the FTSEurofirst 300 index of top European shares was down 0.4 percent at 1,334.83 points.

"The current oil prices and the Fed that basically admitted they are going to pause are not good news for stocks," said Franz Wenzel, strategist at AXA Investment Managers, in Paris.

Airline stocks lost altitude again, tracking a selloff in the sector on Wall Street overnight.

Air France (AIRF.PA: Quote, Profile, Research, Stock Buzz) tumbled 9 percent, Lufthansa (LHAG.DE: Quote, Profile, Research, Stock Buzz) shed 3.2 percent and British Airways (BAY.L: Quote, Profile, Research, Stock Buzz) lost 3.4 percent.

(Reporting by Blaise Robinson)