The Nasdaq jumped 1 percent on Tuesday, reversing an earlier steep drop as tech shares rose and the overall stock market trimmed losses on comments from Federal Reserve Chairman Ben Bernanke that he was ready to take more steps to help the fragile recovery.

The market pared earlier sharp losses, which had pushed the broad S&P 500 into bear market territory, which Wall Street defines as a drop of 20 percent from a recent high.

The latest worries about the euro zone's debt problems kept a lid on the market's gains, and the Dow stayed in negative territory.

Bernanke could be the catalyst for a returned focus to domestic issues, said Marc Pado, U.S. market strategist at Cantor Fitzgerald & Co., in San Francisco.

The Nasdaq led the move higher, with information technology among the S&P 500's top advancing sectors. The S&P technology index <.GSPT> was up 1 percent.

Bernanke told the Joint Economic Committee of Congress that the Fed was prepared to take more steps to help a fragile recovery, held back by a weak job market and financial stresses in Europe.

The Dow Jones industrial average <.DJI> was down 73.71 points, or 0.69 percent, at 10,581.59. But the Standard & Poor's 500 Index <.SPX> was up 2.36 points, or 0.21 percent, at 1,101.59. The Nasdaq Composite Index <.IXIC> was up 32.74 points, or 1.40 percent, at 2,368.57.

Apple shot up 1.5 percent to $380.30 ahead of the release of its new iPhone, dubbed the iPhone 5.

The Federal Reserve chairman's words gave investors some reassurance.

Bernanke's testimony today ... suggests he is very keen to avoid saying anything that might unnerve the financial markets, Paul Ashworth, chief U.S. economist for Capital Economics in Toronto, said in a note.

He didn't repeat that 'there are significant downside risks to the economic outlook,' which was the language included in the last FOMC statement that caused such a panic in the markets two weeks ago.

Analysts have been worried, however, that stocks are headed for an extended period of poor performance, partly because of the fears over deepening problems in Europe.

Earlier, European officials delayed a vital aid payment to debt-stricken Greece, but the government said it was not preparing for a default.

(Reporting by Caroline Valetkevitch; Editing by Jan Paschal)

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