* STOXX 600 down 1.1 pct, up 7.9 pct year-to-date
* Siemens falls as results disappoint, warning hits Vestas
* ECB supervisor lifts Italian banks, results help Commerzbank
* STOXX 600 EPS growth slows to 7.6 pct in third quarter (Recasts, adds details, closing prices)
MILAN/LONDON, Nov 9 (Reuters) - European shares fell on Thursday as a series of underwhelming earning updates, including from industrial giant Siemens, prompted investors to take profits out of a market still trading near two-year highs.
The pan-European STOXX 600 benchmark index fell 1.1 percent, suffering its biggest daily loss since end-June, while Germany's DAX fell 1.5 percent.
The STOXX 600 is up 7.9 percent so far this year following a rally that has been fueled by a combination of strong economic data, solid earnings and easing political fears. Earlier this month it climbed back to its highest since August 2015.
Following such a strong run traders said earnings needed to deliver strong positive surprises to justify further gains but on Thursday a number of companies disappointed.
Siemens fell 3.7 percent. The German engineer posted a worse than expected 10 percent drop in quarterly industrial profit and signaled a tough year ahead as it restructures its turbine and wind power businesses.
"The going is getting a bit harder at this stage," wrote Barclays analyst James Stettler, reiterating his "equal weight" rating on the stock.
Vestas fell 19 percent after the world's largest maker of wind turbines lowered its 2017 profit margin outlook
Among heavy losers were also British luxury brand Burberry , down 9.9 percent after results, and drug maker Hikma , which lost 4.1 percent after lowering 2017 revenue guidance for its generics business for a third time.
According to Deutsche Bank strategists, EPS (earnings per share) growth for the STOXX 600 has slowed to 7.6 percent in the third quarter following the broad-based earnings surge in the first quarter and the financials-driven beat in the second.
It said the result were in line with expectations, with earnings beats hitting the lowest since the end of 2015 as euro strength offset the positive impact of a strong growth backdrop.
The mood on Thursday was also dampened by worries over tax reforms in the United States.
In spite of the pull-back some investors remained upbeat for prospects of the region's equities.
"European equities have delivered excess returns this year and we see this as one of the better markets for coming years, said Kamal Fahad, senior market strategist at Kleinwort Hambros.
Elsewhere ArcelorMittal fell 3.4 percent after EU regulators said they would investigate whether its proposed purchase of Italian steel plant Ilva would lead to price hikes.
Banks were again in focus with Italian lenders rebounding 1 percent after being hit in the previous session by worries over non-performing loans and Creval's move to raise cash to shed bad debts.
Daniele Nouy, the ECB's top supervisor, said on Thursday that the European Central Bank was prepared to delay and improve its new, stricter rules on bad bank loans after fierce criticism from the European Parliament and Italy.
Commerzbank rose 2.4 percent after it swung to net profit in the third quarter. The German bank reiterated it was still expecting to eke out a "slightly positive" net profit for the full year.
Still in the financial sector, shares in Dutch insurer Aegon were up 4.8 percent as it reported earnings above consensus.
(Reporting by Danilo Masoni and Julien Ponthus, additional reporting by Sujata Rao in London; Editing by Alison Williams)