* Fed's Bernanke dampens optimism over speedy U.S. recovery
* ECB liquidity offer led shares higher early in session
* Brazil Bovespa gains 0.17 pct; Mexico IPC up 0.19 pct
By Asher Levine and Rachel Uranga
SAO PAULO/MEXICO CITY, Feb 29 (Reuters) - Latin American stocks reversed early gains on Wednesday after comments by Federal Reserve Chairman Ben Bernanke dampened optimism that a U.S. economic recovery was picking up speed.
The MSCI Latin American stock index fell after hitting a seven-month high reached earlier in the session, shedding 0.62 percent to 4,249.50.
Homebuilders drove losses in Brazil's benchmark Bovespa index, while telecommunications company America Movil led Mexico's IPC index higher.
Shares had risen in early trading after European banks seized 530 billion euros in the European Central Bank's second offering of cheap three-year loans, stoking investor expectations that the liquidity boost would spur economic growth in the euro zone and spark demand for riskier assets.
Comments from Bernanke, in semi-annual testimony to Congress, later threw cold water on the rally, after he said the labor market in the United States, the world's largest economy, is still "far from normal."
"The gains from the ECB auction were expected, so people weren't ready to buy into the idea that those would continue in the short-term," said Ruy Araujo, an analyst with Metodo Investimentos in Sao Paulo. "The market has also been a little euphoric of late in relation to a recovery in the U.S. economy, and Bernanke's speech reminded people that the U.S. is moving forward only at a moderate pace."
Trade in Brazil was choppy, with the Bovespa index hitting its highest level since late April before paring gains to trade up 0.17 percent to 66,069.78 points. The Bovespa is on track to finish February with a 4.5 percent gain.
Homebuilder Gafisa lost 6.61 percent after announcing it had rejected an offer from private equity firms GP Investimentos and Equity International to purchase part of the company.
Shares of homebuilders PDG Realty and MRV Engenharia also fell.
Mexico's IPC index gained for a second session in three, adding 0.19 percent to 38,091.89. The index is set to close February with a fourth straight monthly gain, adding 1.77 percent.
America Movil, the telecommunications firm controlled by billionaire Carlos Slim, rose 0.52 percent.
The exchange will assign heavier weighting to America Movil when it rebalances the index, effective on Thursday. The company already accounts for nearly 22 percent of the index's weight.
"Today there are going to be a lot of strong movements," said Gerardo Sienra, a trader at brokerage Intercam in Mexico. "People are going to be buying because of the rebalancing."
America Movil shares had risen around 2.5 percent on Tuesday partly in anticipation of the change, he said.
Chile's IPSA index rose for a second day, climbing 0.28 percent to 4,533.30. The IPSA is on track for a 6.5 percent rise in February, its biggest monthly gain since October.
Regional power producer Endesa Chile led gains, rising 1.96 percent, while steelmaker CAP rose 1.7 percent.