NEW YORK, July 09 (Reuters) - The S&P 500, the broadest gauge of U.S. stocks, entered a bear market on Wednesday, dealing U.S. equity indexes a major setback as investors worry that mounting credit losses will hurt U.S. economic growth.

With bear market runs of the S&P 500 averaging a decline of about 29 percent -- from peak to trough -- since 1929, market technicians see the index scrambling for support at around the 1,220 level, based on Wednesday's closing level of 1,244.69

"The thing that's troubling right now is that it doesn't seem there's any positive catalyst," said Cleveland Rueckert, market analyst at Birinyi Associates Inc, in Stamford, Connecticut.

"Analysts," he said, "are becoming more bearish as we get closer to the time when companies are due to start reporting second-quarter earnings."

To officially confirm the onset of a bear market, the index has to end the session at least 20 percent below its recent closing peak. The S&P 500 hit a record closing high of 1,565.15 on Oct 9, 2007.

On Wednesday, the Standard & Poor's 500 dropped 29.01 points, or 2.28 percent, to 1,244.69 at the close.

Its descent into a bear market, or a prolonged period of falling stock prices, comes after the Dow Jones industrial average suffered a similar fate late last week, joining the Nasdaq, which was the first to enter bear market terrain in February.

In the "best case scenario," the technical deterioration is likely to fuel a view that perhaps the broader market has become oversold, a notion that could help spark a countertrend rally in the next few weeks, according to John Kosar, market technician and president of Asbury Research in Chicago.

"Although the October cyclical downtrend in the U.S. stock market remains intact, favorable conditions exist for a corrective rally to begin over the next week or two," he said in a research note.