* Emails show Russian prosecutor offered Trump Jr. information on Clinton
* Yellen to testify later in the week
* Indexes down: Dow 0.1 pct, S&P 0.28 pct, Nasdaq 0.08 pct (Adds details)
By Ankur Banerjee and Anya George Tharakan
July 11 (Reuters) - U.S. stocks pared some of its losses on Tuesday after falling sharply as emails disclosed by President Donald Trump's eldest son cited Russian support for his father's election campaign.
Donald Trump Jr was told a Russian prosecutor was offering incriminating information about Hillary Clinton as part of Russian government support.
Trump Jr. agreed to meet with a Kremlin-linked lawyer during the campaign after being promised damaging information about Clinton, the New York Times reported on Sunday.
Financial markets were jolted by the revelation as investors assessed its impact on Trump administration's proposed policies.
"I think people are worried that it just means more political uncertainty, and sort of a continuation of the stalemate in Washington, a continuation of the delay in trying to get the Trump agenda passed through Congress," said Robert Pavlik, chief market strategist at Boston Private Wealth in New York.
The dollar index, which tracks the greenback against six major rivals, also turned negative after the news of the email.
Part of the drop in the market could have been due to algorithmic trading, said Bucky Hellwig, senior vice president at BB&T Wealth Management in Birmingham, Alabama. "They look for certain words in news, so we saw this selloff." Stocks were slightly higher in early trading ahead of Federal Reserve chief Janet Yellen's two-day testimony starting on Wednesday as the central bank prepares to unwind the massive hoard of bonds it bought to ease the financial crisis.
"We've got Yellen's testimony tomorrow, there may be a little bit of nervousness ahead of that ... the semi-annual monetary policy testimony has often been a big deal for the markets," Scott Brown, chief economist at Raymond James in St. Petersburg, Florida.
"I think there may be some fears that she's going to come out relatively hawkish."
Investors will be looking at second-quarter earnings reports on Friday from big U.S. banks including JPMorgan Chase, Wells Fargo and Citigroup.
Ten of the 11 major S&P 500 sectors were lower, dragged down by losses in financials sector.
At 12:30 a.m. EDT the Dow Jones industrial average was down 22.01 points, or 0.1 percent, at 21,386.51, the S&P 500 was down 6.84 points, or 0.281779 percent, at 2,420.59 and the Nasdaq Composite was down 4.77 points, or 0.08 percent, at 6,171.63.
Snap Inc shares fell 5.6 percent on Tuesday, after lead underwriter Morgan Stanley downgraded the stock and raised concerns about the social media company's ability to compete against rival Instagram.
Shares of Arena Pharmaceuticals Inc soar about 50 percent after the drug developer said on Monday its experimental drug for a rare but deadly lung disease met the main goal in a mid-stage study.
Declining issues outnumbered advancers on the NYSE by 1,438 to 1,336, for a 1.08-to-1 ratio on the downside. On the Nasdaq, 1,380 issues fell and 1,355 advanced for a 1.02-to-1 ratio favoring decliners. (Reporting by Ankur Banerjee in Bengaluru, Additional reporting by Caroline Valetkevitch in New York; Editing by Arun Koyyur)