NEW YORK (CNN/Money) - Stocks fell early Wednesday, as investors reacted to news of a blast in Iran and geared up for the start of Federal Reserve Chairman Alan Greenspan's congressional testimony.

The Dow Jones industrial average (up 46.19 to 10,837.32, Charts), the broader Standard & Poor's 500 (down 2.31 to 1,207.81, Charts) index and the Nasdaq composite (down 5.56 to 2,083.65, Charts) all declined modestly around 10 minutes into the new session.

Fed chairman Greenspan will give his semi-annual testimony on the economy and monetary policy before a Senate panel Wednesday and a House panel Thursday. His testimony Wednesday was due to start around 10:00 a.m. ET.

Greenspan is expected to discuss the federal budget deficit, the future of Social Security and the outlook for short-term interest rates, all of which will be of interest to both bond and equity investors.

Stock market futures had briefly pointed to an even weaker open following reports of a blast in an Iranian city caused by an aircraft-fired missile. However, Iranian media later said that the blast was the result of a fuel tank falling from a plane, rather than an attack.

Upbeat reads on the U.S. economy helped temper some of the jitters about Greenspan and the Iran events.

Housing starts rose to a 2.16 million unit annual rate in January, up from December and well above expectations. Building permits, seen as a sign of builder confidence, rose to a 2.11 million unit annual rate in January, also above the previous month and expectations.

In corporate news, Applied Materials (down $0.07 to $17.42, Research) reported fiscal first-quarter sales and earnings late Tuesday that grew from a year ago and topped estimates. The chip gear maker also forecast current-quarter earnings that are above estimates. Countering that, AMAT warned that new orders may weaken in the short-term amid an industry slowdown.

Shares were little changed in the early going.

U.S. light crude oil for March delivery rose 74 cents to trade at $48 a barrel on the New York Mercantile Exchange, ahead of the weekly oil inventory data, due around 10:30 p.m. ET.

Treasury prices edged lower, with the yield on the 10-year note rising to 4.11 percent from 4.10 percent late Tuesday.

In currency trading, the dollar was little changed versus the euro and higher versus the yen.

COMEX gold fell $1.10 to trade at $426.20 an ounce.

In global trade, Asian-Pacific markets ended mixed, and European shares were lower at midday.