* FTSEurofirst 300 index falls 0.3 percent
* Spanish banks fall after Moody's puts Spain on review
* For up-to-the-minute market news, click on
By Brian Gorman
LONDON, Dec 15 (Reuters) - European shares fell in early trade on Wednesday after the U.S. Federal Reserve gave a cautious assessment of the strength of the economic recovery, and a ratings agency put Spain on review for a downgrade .
Spain's IBEX fell 1.7 percent after ratings agency Moody's said it had put Spain on review for a possible downgrade because of its high funding needs and doubts about its banking sector and regional finances.
Spanish banks Banco Santander and BBVA fell 2.9 and 2.5 percent, respectively.
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For a graphic showing Euro zone credit ratings and spreads: http://r.reuters.com/get52k
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Other banks to fall included BNP Paribas, Societe Generale and UniCredit, down between 1.8 and 2.9 percent.
At 0941 GMT, the FTSEurofirst 300 index of top European shares was 0.3 percent lower at 1,129.18 points, after rising for seven straight sessions, its longest winning run in six months, and hitting its highest close in nearly 27 months. The Fed said the economic recovery was still too slow to bring down unemployment and reaffirmed its commitment to buy $600 billion in government bonds.
"The very first line of the very first paragraph is justification for what (the Fed) it's doing -- it talks about a recovery that just isn't strong enough to bring down the unemployment rate," said Mike Lenhoff, chief strategist and head of research at Brewin Dolphin Securities, in London.
Across Europe, Britain's FTSE 100, Germany's DAX and France's CAC40 fell between 0.3 and 0.6 percent.
"We've had a surprisingly strong run," said Lenhoff. "The market may dither around for a while but the underlying direction is really upwards. Markets have bought into the reflationary story."
INDITEX FALLS
Spain's Inditex, the world's No.1 clothing retailer, dropped 3.5 percent after signalled a slowdown in recent underlying sales growth.
Rival fashion group Hennes & Mauritz fell 1.5 percent after it said sales at its established stores rose 8 percent in November from a year earlier.
Drugmaker Novartis rose 4.2 percent after clinching full ownership of eyecare group Alcon thanks to a sweetened deal.
French information technology firm Atos Origin surged 12 percent after agreeing to buy Siemens' IT unit Solutions and Services (SIS) in an 850 million euro deal. Siemens rose 1.6 percent.
In European macroeconomics, Sweden's central bank raised its key interest rate a quarter point to 1.25 percent as expected on Wednesday, the fourth such increase this year as it looks to cool a record pace of economic growth.
While many European nations face years of austerity as governments attempt to restore order to public finances, Sweden has bounced back rapidly from last year's downturn.
UK unemployment rose for the first time in six months in the three months to October, official data showed.
The European benchmark is up more than 5 percent in December. This "could still be dismissed as a low-quality, unsustainable low-volume squeeze," Evolution Securities says in a note.
"Maybe, but this misses the improving economic confidence, the awaited asset allocation shift from bonds to equities, and the powerful seasonal story for European and UK equities out to end-April."
A raft of data due later from the United States includes measures of industrial output, the housing market and manufacturing. (Graphic by Scott Barber; Editing by Hans Peters)