* Bernanke stresses Fed will act if economy falters * Fed chief offers no hints when more aid will come * Most Treasuries rise after three-day retreat By Richard Leong NEW YORK, June 7 (Reuters) - Most U.S. government debt prices rose on Thursday, snapping three days of decline, as Federal Reserve Chairman Ben Bernanke said the U.S. central bank was ready to shield the economy if financial troubles intensified. Bernanke told a congressional committee the Fed was closely monitoring "significant risks" to the U.S. economy from Europe's debt and banking crisis. "He clearly kept the door open for more stimulus measures," said Stephen Wood, chief market strategist with Russell Investments in New York, which manages $155 billion. Little progress on a rescue plan for Spain's problem banks and nagging worries about Greece's possible exit from the euro zone ahead of its June 17 national election also revived some demand for U.S. government debt, whose yields fell to historic lows last week. "We are still totally held hostage by Europe," said Thomas Roth, executive director of U.S. government bond trading at Mitsubishi UFJ Securities USA in New York. While asserting the U.S. central bank will act if the U.S. economy falters, Bernanke offered no hints that more monetary stimulus is on the way soon in testimony before Congress' Joint Economic Committee. Some traders were disappointed that Bernanke pledged no imminent third round of quantitative easing, or QE3, or at least an extension of the $400 billion "Operation Twist," which will expire at the end of June, analysts said. "Bernanke didn't bring it," said Ellis Phifer, senior market analyst with Raymond James at Memphis, Tennessee. This in turn hurt the 30-year bond, which had rallied last week partly on bets the Fed might buy more long-dated debt for either QE3 or a protracted "Operation Twist." Prices on the 30-year government bond ended down 11/32 at 105-1/32 for a yield of 2.75 percent, up 1.6 basis points on the day. The 30-year yield has risen 24 basis points since touching a record low of 2.51 percent last Friday. Selling in 30-year dollar interest rate swaps exacerbated the weakness in 30-year Treasuries, traders said. Other Treasury maturities rose as they recovered from earlier losses tied to selling on news that China cut key interest rates by a quarter point. Treasuries prices also rebounded after Fitch downgraded Spain's credit rating by three notches, even though the euro zone's fourth-biggest economy fetched solid demand for 2.1 billion euros of new debt. Benchmark 10-year notes finished 4/32 higher at 100-30/32, yielding 1.65 percent, down 1.4 basis points from Wednesday's close. The 10-year yield has risen from a historic low of 1.442 percent set last Friday. SIGNS OF WOBBLY JOB MARKET Speculation on more Fed stimulus escalated after a stunningly poor payrolls report last Friday. The notion of a weakening jobs market was little changed after government figures showing a modest decline on U.S. jobless claims last week. Regarding supply, the Treasury Department, as expected, said it will sell $32 billion in new three-year notes and reopen a prior 10-year note issue by $21 billion and an older 30-year bond issue by $13 billion next week. Treasury yields might resume their rise as investors make room for the supply, analysts said. Before next week's auctions, Treasuries could head higher if European leaders deliver solutions for the region's debt crisis or the U.S. central bank takes clear steps toward further monetary accommodation, they said. If these factors materialize, "we could easily see 10-year yields back in the 1.75 percent to 2 percent range before you know it," said Kevin Flanagan, chief fixed-income strategist at Morgan Stanley Smith Barney in Purchase, New York.