GLOBAL MARKETS-Stocks, oil fall further, Bernanke offers support

* S&P flirts with bear market, down some 20 pct from high

* U.S. crude oil reaches 2011 low as aid to Greece delayed

* US dollar falls vs euro, Bernanke says Fed ready to act

(Adds analyst quote, updates prices)

By Walter Brandimarte

NEW YORK, Oct 4 (Reuters) - U.S. stocks were on the verge of bear market territory on Tuesday, and U.S. crude oil prices fell to a 2011 low as investors worried about the economic implications of an increasingly likely Greek default.

The S&P 500 index <.SPX>, a broad measure of the U.S. stock market, initially fell more than 20 percent from its 2011 high. For many investors, crossing that threshold is a sign that stock losses may be sustained for a longer period of time.

The losses were cushioned by a speech from Federal Reserve Chairman Ben Bernanke, who said the bank was ready to act further to support the economy. For details, see [ID:nN1E7930IZ].

That statement, some investors said, left the door open to another round of quantitative easing policies, which reduced the safe-haven appeal of U.S. government bonds and the dollar.

"The economy is in a protracted slowdown, and until there's a resolution with Greece, that situation will continue to linger over the market," said Robert Pavlik, chief market strategist at Banyan Partners LLC in New York. "This could turn into a self-fulfilling prophecy of recession."

Greece appeared more likely to default on its debt after euro zone finance ministers postponed a vital aid payment to Athens until mid-November. [ID:nL5E7L419D]

The impact of a possible default on the global economy and particularly on the banking sector worried markets after EU ministers said they were reviewing the size of private sector involvement in a second bailout package for Greece.

Key Wall Street indexes fell more than 2 percent earlier on the day, trimming losses after Bernanke's speech. The S&P 500 crossed the bear market threshold early in the day but then recovered some ground.

The Dow Jones industrial average <.DJI> was down 53.96 points, or 0.51 percent, at 10,601.34. The Standard & Poor's 500 Index <.SPX> was up 2.34 points, or 0.21 percent, at 1,101.57. The Nasdaq Composite Index <.IXIC> was up 35.91 points, or 1.54 percent, at 2,371.74.

World stocks hit a 15-month low, with the MSCI All-Country World index <.MIWD00000PUS> falling 1.7 percent.

U.S. crude oil prices dropped to as low as $74.95 a barrel, its lowest since Sept, 2010. They last traded 0.9 percent lower at $76.88.

The euro was up 0.57 percent against the dollar at $1.3207, however, after hitting a near nine-month low against the greenback earlier in the session.

"We've been selling off over the last 48 hours or so, so we're overdue for a little bit of a bounce," said Brian Dolan, chief strategist at Forex.com in Bedminster, New Jersey. "The combination of people being short and Bernanke opening the door to QE3 is helping stabilize sentiment."

In the government debt market, longer-dated Treasuries lead the losses, with 30-year bonds falling 53/32 in price for a yield of 2.795 percent.

(Additional reporting by Ryan Vlastelica and Nick Olivari)