Stocks fell for a third day on Tuesday on worries Europe's debt problems will hurt banks, pushing the S&P 500 into bear market territory.

The broad index has fallen 20 percent from its recent high in April, which traders define as a bear market and a sign stock losses may be sustained.

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

Earlier, euro zone finance ministers delayed a vital aid payment to debt-stricken Greece, but the government said it was not preparing for a default.

The S&P 500 broke through support at 1,120, and analysts see the next key level at 1,080.

It's going to be important to see how the day ends today, because if we end above 1,080, that would at least start to stem some of the momentum players because the momentum players would feel like there seems to be some interest, support there, said Ken Polcari, managing director at ICAP Equities.

Morgan Stanley was down 1.4 percent at $12.30. The stock is off about 56 percent this year. Shares of Bank of America were down 4.5 percent at $5.28.

The Dow Jones industrial average <.DJI> was down 133.77 points, or 1.26 percent, at 10,521.53. The Standard & Poor's 500 index <.SPX> was down 9.29 points, or 0.85 percent, at 1,089.94. The Nasdaq Composite Index <.IXIC> was down 4.99 points, or 0.21 percent, at 2,330.84.

On Nasdaq, Apple reversed earlier gains and was last down 2.3 percent at $365.68, ahead of the release of its new iPhone, dubbed the iPhone 5.

Among Nasdaq advancers, shares of Sears Holdings gained 6.9 percent to $61.19 and were the top percentage gainer.

The market pared losses before midday after reassuring comments from Federal Reserve Chairman Ben Bernanke.

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.

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, wrote in a note.

(Reporting by Caroline Valetkevitch; Additional reporting by Chuck Mikolajczak; Editing by Kenneth Barry)

Ben Bernanke Apple inc.