MSCI's all-country world equity index pared gains to trade about 0.3 percent higher.

Tuesday's late rally on Wall Street was due in part to speculation Bernanke would

At midday, the Dow Jones Industrial Average was up 16.28 points, or 0.16 percent, at 10,246.24. The Standard & Poor's 500 Index was up 1.10 points, or 0.10 percent, at 1,084.58. But the Nasdaq Composite Index was down just 0.95 of a point, or 0.04 percent, at 2,221.54.

European shares made significant gains for the first time in more than a week, with banks rising after strong results from US financials and on optimism that stress tests will boost the sector's outlook.

The FTSEurofirst 300 index of top European shares rose 1.1 percent to close at 1,017.88 points, after earlier climbing more than 2 percent.

The euro fell against the dollar as tepid demand at a Portuguese debt sale underscored fears about Europe's banks days before the European Union was due to reveal which ones need to raise more capital.

The dollar softened against the yen. The dollar was up against a basket of major currencies, with the US Dollar Index up 0.38 percent at 83.058.

The euro was down 0.57 percent at $1.281. Against the yen, the dollar was down 0.29 percent at 87.25.

"The euro is correcting lower as a result of the Portuguese auction," said Michael Hewson, currency strategist at CMC Markets. "It doesn't take much to sow seeds of doubt in the euro."

Oil prices fell Wednesday, giving up early gains as traders reacted to an unexpected increase in crude reserves that suggested weaker demand in key energy consumer the United States.

New York's main contract, light sweet crude for delivery in September, sank 49 cents to $77. 9 a barrel.

Brent North Sea crude for September dropped 29 cents to $75.93.

The US Department of Energy (DoE) announced Wednesday that American crude reserves rose 400,000 barrels in the week ending July 16.

The news shocked traders because market expectations had been for a large drop of 1.3 million barrels, according to analysts polled by Dow Jones Newswires.

The DoE said gasoline (petrol) inventories grew 1.1 million barrels last week, well above the 700,000-barrel increase forecast by analysts.

Stocks of distillates, which include diesel and heating fuel, added 3.9 million barrels, more than double expectations for a hefty gain of 1.6 million.