Stocks lower; S&P 500 near bear territory

NEW YORK -- Stocks are wavering and threatening to fall into a bear market for the first time since the financial crisis, on rising fears Greece may be careening closer to default.

The early day selloff moderated in the morning following comments by Federal Reserve chairman Ben Bernanke. But at mid-afternoon, the Dow Jones industrial average, Standard & Poor's 500 and Nasdaq were all lower.

While stocks may be attempting to narrowly avoid the informal definition of bear, which is a 20% decline from the recent high, investors are already treating it like a bear, says Chris Johnson of Johnson Research Group. "By almost any measure, we are in a bear," he says.

With the steady diet of bad news, such as the political wrangling over the U.S. debt ceiling and now the debt woes in Europe, investors have had little reason to buy stock, he says.

Investors will be closely watching the 1100 level for the S&P 500. If that level can hold, Johnson says, that will give some investors courage that stocks might be hitting a bottom.

In Europe, Germany's DAX was down 3% while the CAC-40 in France fell 2.6%. The FTSE 100 index of leading British shares fell 2.6%.

Shares in Franco-Belgian bank Dexia bore the brunt of the selling in Europe as investors grew increasingly concerned about its survival in its current form despite government promises to prop up the bank and insure every cent of its deposits.

With the markets bracing for a Greek debt default soon, investors are concerned about what bonds Europe's banks are holding and banks themselves have become reluctant to lend to one another.

In Brussels, Dexia's share price was down more than 18%, prompting France and Belgium to voice their support for the bank as it tries to engineer a way out of its current crisis.

The Associated Press contributed to this report.