(Adds quotes, updates prices)
* Investors seek out earnings bright spots
* Chip-maker ARM sparks recovery
* Investors shrug off China, Credit Suisse
By Jamie McGeever
LONDON, Oct 21 (Reuters) - European stocks rose on Wednesday as investors took heart from the few bright spots in an otherwise gloomy set of third quarter earnings reports that, along with the biggest fall in Chinese stocks in over a month, had dragged on markets earlier.
Shares in ARM Holdings ARM.L , the British chip designer whose technology powers the iPhone, led the way and overrode concerns about Scandinavian banks and Switzerland's financial blue chip Credit Suisse CSGN.VX .
Chinese bourses gave up earlier gains to close down 3 percent, the biggest fall since Sept. 15. Commodity prices fell, although a rebound in UK oil and gas stocks sparked a recovery in the European resources and energy sector.
The cautious tone in major government bond markets at the open prevailed, making for lower yields across the board, while most major exchange rates were stable.
"The biggest gainer is ARM Holdings after it announced a 7.5 percent jump in revenues. This is good news for ARM, which could keep on feeding Apple (O:AAPL) with its more powerful chips used in new iPhone models," said Ipek Ozkardeskaya, market analyst at London Capital Group.
At midsession the FTSEuroFirst index of leading 300 European shares was up 0.2 percent at 1,345 points .FTEU3 .
ARM was up 7 percent, its biggest one-day rise in 2 1/2 years. Shares in Credit Suisse were down 1.5 percent, having lost as much as 4.5 percent earlier after it announced plans to raise 6 billion Swiss francs ($6.3 billion) in capital. ID:nL8N12L099
Germany's DAX was up 0.7 percent .GDAXI , France's CAC 40 up 0.6 percent .FCHI and Britain's FTSE 100 .FTSE up 0.4 percent.
U.S. futures pointed to a higher opening on Wall Street of around 0.4 percent ESc1 , more than reversing Tuesday's small losses.
Earlier in Asia, MSCI's broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS slipped 0.25 percent.
In Japan, the slowest growth in exports in over a year fuelled talk of recession. But the prospect of more stimulus from the Bank of Japan lifted the Nikkei 225 to its highest since Sept. 9, ending up 1.9 percent at 18,554 points .N225 . ID:nL3N12I05T
ECB TO STAY PUT?
Earnings for S&P 500 companies are expected to have fallen about 4 percent in the third quarter, while revenue is expected to have declined 3.8 percent, according to Thomson Reuters data.
Economic news from the United States was moderately upbeat as housing starts increased 6.5 percent in September to an annual pace of 1.21 million units, beating expectations for 1.15 million units.
There was also better news on bank lending in the euro zone as data from the European Central Bank on Tuesday showed a further easing in credit conditions and improving demand for loans.
That might lessen the need for the ECB to immediately ramp up its 1 trillion euro asset purchase program. ID:nL8N12K1EW
The ECB's governing council meets on Thursday and markets expect it to highlight a willingness to act to boost inflation, but not just yet.
"Actions are highly unlikely this week. But its words will need to confirm a strong dovish bias that keeps the ECB on track for extra QE (quantitative easing) in December if the market is to keep its composure," Royal Bank of Scotland (L:RBS) analysts wrote in a client note on Wednesday.
The euro was steady at $1.1350 EUR= , hemmed in by support at $1.3300 and resistance around $1.1386. The dollar index was last also little-changed at 94.865 .DXY .
The Australian dollar was the biggest mover among the major currencies, under pressure from the weakness in Chinese stocks and world commodity prices. It was last down 0.4 percent at $0.7230 AUD= .
Oil prices softened on speculation U.S. inventory data would only underline the extent of oversupply in the world. The U.S. Energy Information Administration (EIA) will report official inventory data on Wednesday.
U.S. crude CLc1 fell 1.2 percent to $45.73 per barrel, while Brent LCOc1 lost 0.5 percent to $48.48.
In bonds the 10-year U.S. Treasury yield was down almost 2 basis points at 2.05 percent US10YT=RR .