NEW YORK (CNN/Money) - Stocks appeared set to open slightly lower Wednesday ahead of the mid-morning congressional testimony due from Federal Reserve Chairman Alan Greenspan and following reports of a blast in an Iranian city.

The reports indicated that there was a large blast heard near the city of Dailam in Iran that was caused by an aircraft-fired missile -- reports that were not independently confirmed.

U.S. stock futures came off their lows when Iranian media later said the blast may have been caused by the fuel tank of an aircraft.

The Iran reports offset a better-than-expected housing starts report from the Commerce Department.

Greenspan is set to start his semi-annual testimony to a Senate committee Wednesday, with investors listening for more clues on the pace of future interest rate hikes as well as his views on issues such as social security reform.

Major markets in Asia closed mostly higher, although Japan's Nikkei lost ground on a report that showed the economy there unexpectedly contracted in the fourth quarter. Major European markets were lower in early trading.

U.S. stocks start trading Wednesday with the Dow Jones industrial average at its high for the year after the major indexes all posted gains Tuesday.

Oil prices gained in early trading Wednesday, ahead of the weekly report on U.S. fuel inventories due Wednesday morning. The March light crude contract gained 74 cents to $48 a barrel in electronic trading, getting a spurt on the Iran reports.

Treasury prices were unchanged, with the yield on the 10-year note at 4.10 percent. The dollar gained against the yen on the report on Japan's economy, while it was little changed against the euro.

Before the opening bell, the government said housing starts jumped an unexpected 4.7 percent in January to a 2.16 million annual rate.

Economists surveyed by Briefing.com forecast that housing starts would fall to an annual pace of 1.93 million in January from a revised 2.06 million rate in December.

Building permits rose to a 2.1 million rate versus forecasts that permits would slip to a 2 million rate from a revised 2.07 million the previous month.

Economic reports due later Wednesday also include readings on industrial production and capacity utilization at the nation's factories.

January industrial production is seen to have risen 0.3 percent, down from the 0.8 percent gain in December. Capacity utilization is forecast to edge up to 79.3 percent from 79.2 percent use in December.

In corporate news, Applied Materials (Research), which makes equipment used by computer chip makers, reported better than forecast gain in earnings in its fiscal first quarter. It shares gained edged slightly higher in after-hours trading.

Earnings reports are due Wednesday from two Dow components. Soft drink maker Coca-Cola (Research) is set to report before the market opens while Hewlett-Packard (Research), which last week forced out Chairman and CEO Carly Fiorina, reports after the market close.

Stock of Dow component Pfizer (Research) could come under pressure Wednesday due to an unusual three-day public review by two outside advisory committees of the Food and Drug Administration to consider the safety of COX-2 painkillers still on the market such as Pfizer's Celebrex and Bextra. Vioxx, the COX-2 drug from Merck (Research), was pulled off the market last year due to the risk of heart attack and stroke.