GLOBAL MARKETS-Bargain hunters boost shares, euro flat

* Dow, S&P 500 down for third straight week

* Global shares gyrate on Bernanke, Intel

* Euro rises but yen drops on intervention concerns

By Daniel Bases

NEW YORK, Aug 27 (Reuters) - Global stocks rose on Friday, as bargain hunters erased early losses sparked by downbeat remarks on the economy from Federal Reserve Chairman Ben Bernanke and a warning of lower revenues by bellwether Intel.

The combination of the two factors sent stocks reeling and caused a surge of safe-haven buying of the U.S. dollar. Oil and gold prices also fell. But those losses proved short-lived.

The accumulation of gloomy economic data and market losses for much of August proved too tempting for investors looking to pick up assets on the cheap.

For instance, on the benchmark Standard & Poor's 500 stock index, early losses pulled the overall level down to 1,040, a key level of technical resistance.

"We're sitting on important support and in thin markets you don't want to be leaning too far in one direction coming into a very low volume week," said Richard Ross, global technical strategist at Auerbach Grayson in New York.

"If you were short the market throughout this month, you made a nice profit, you want to lock that in."

Even U.S. economic data showing a sharp downward revision in second quarter gross domestic product was less gloomy than economists expected and underpinned share prices in Europe as well as on Wall Street. For details, see [ID:nN26193565]

At the close of trade, the Dow Jones industrial average <.DJI> gained 164.84 points, or 1.65 percent, to 10,150.65. The Standard & Poor's 500 Index <.SPX> rose 17.37 points, or 1.66 percent, to 1,064.59. The Nasdaq Composite Index <.IXIC> climbed 34.94 points, or 1.65 percent, to 2,153.63.

For the week the Dow industrials fell 0.61 percent, the S&P 500 lost 0.66 percent and the Nasdaq dropped 1.19 percent.

Stocks initially fell after Bernanke said the central bank was ready to counter a softening recovery, saying unconventional measures would be considered, but gave no hints on what the Fed intended to do. [ID:nFEDAHEAD]

But the Fed chairman downplayed concerns the economy might slip back into recession, reassuring investors spooked by his recent comments that the economy faced "unusual uncertainty."

Intel Corp said third-quarter revenue would be below its previous outlook, perhaps by as much as $1 billion due to weaker demand for personal computers. The stock fell after the forecast, but relief the downward revision wasn't worse led to end of day share gains of 1.05 percent to $18.37. [ID:nN27260125]

Europe's top stocks held gains into the close of trade, but lost ground for a third straight week. The FTSEurofirst 300 index <.FTEU3> gained 0.6 percent on the day, but slipped 0.27 percent on the week.

European telecoms performed well, with Vodafone , BT , Telefonica , Deutsche Telekom and France Telecom rose between 1.9 and 2.8 percent.

The MSCI All-Country World equity index <.MIWD00000PUS> rose 0.41 percent, off a seven-week low hit earlier this week. The index is down 2.9 percent so far in August. The Thomson Reuters global stock index <.TRXFLDGLPU> gained 0.77 percent. Emerging stocks <.MSCIEF> climbed 1.46 percent.

CURRENCIES AND DEBT

The euro recovered against the U.S. dollar following Bernanke's comments and Intel's report.

After slipping as low as $1.2676 according to Reuters data in the initial reaction, the euro traded at $1.2732, up 0.10 percent.

The dollar, however, held its gains against the yen, rising 0.90 percent at 85.21 .

Analysts said the dollar would remain supported against other safe haven assets because Bernanke gave no firm commitment the central bank would provide additional easing, which could put downward pressure on interest rates.

The yen is under pressure as speculation persisted that Tokyo might take steps to stem export-damaging strength in the Japanese currency. The yen is hovering near a 15-year peak of 83.60 against the greenback on safe-haven trade that is choking off its already slumbering economy.

Prime Minister Naoto Kan said he would take firm action on currencies when needed and that he would meet Bank of Japan Governor Masaaki Shirakawa when the central bank chief returns from the Jackson Hole conference. [ID:nTKZ006504]

The BOJ's policy board is scheduled to hold a regular two-day meeting starting on Sept. 6, the paper said.

"I don't think we'll see intervention around current levels unless we get a disorderly move where dollar/yen falls sharply, say by 3 yen, during one day," said Gavin Friend, currency strategist at nabCapital.

U.S. Treasuries prices fell on profit-taking after Bernanke signaled no imminent bond buying by the central bank.

The benchmark 10-year Treasury fell 1-14/32 points in price, driving the yield up to 2.65 percent.

German Bund futures settled 28 ticks lower to 133.66, with traders saying the market was disappointed that Bernanke didn't announce any new stimulus measures.

Crude oil settled up 2.47 percent to $75.17 per barrel, and spot gold prices gained $2.56 to $1,237.50.

(Additional reporting by Lucia Mutikani, Burton Frierson, Vivianne Rodrigues, Ryan Vlastelica, Franklin Paul, Nick Olivari, Natsuko Waki, Atul Prakash, Ian Chua; Editing by Andrew Hay)