Europe shares pare losses after Bernanke comments

LONDON, July 8 (Reuters) - European shares pared losses in early afternoon trade on Tuesday, tracking a recovery in U.S. futures as crude oil fell and after Federal Reserve Chairman Ben Bernanke said the bank may extend emergency lending facilities.

By 1247 GMT, the FTSEurofirst 300 index was down 1.09 percent at 1,165.90, having fallen as much as 2.6 percent earlier in the session.

U.S. futures reversed early losses, with S&P 500 futures SPc1 up 0.04 percent and futures on the Dow Jones industrial average DJc1 were flat.

Banks such as HSBC (HSBA.L: Quote, Profile, Research), Credit Suisse (CSGN.VX: Quote, Profile, Research) and UBS (UBSN.VX: Quote, Profile, Research) came off lows after Bernanke eased some of the existing concern about the need for additional capital raising.

The shares were down between 1 and 3 percent.

"That is certainly helping the financials after the sharp drop we saw yesterday and it's just a sign to investors that they don't want to let them fall any further," Stefan de Schutter at Alpha Trading in Frankfurt said.

"In the short-term it helps to settle fears that banks may go bust and that was the whole point," he added.

(Reporting by Patrizia Kokot)