Stocks brace for early selloff

NEW YORK (CNNMoney.com) -- U.S. stocks were set for a lower start Wednesday as concerns about European debt resurfaced and investors await more information about the housing market.

Dow Jones industrial average, S&P 500, and Nasdaq 100 futures were all down ahead of the opening bell.

Futures measure current index values against perceived future performance and offer an indication of how markets may open when trading begins.

Stocks rallied Tuesday, with all three major indexes ending at new 18-month highs following the release of an existing home sales report that was better than expected.

But renewed concerns over European debt problems beyond Greece may lead to a small dip in the markets, said Anthony Conroy, head trader at BNY ConvergEx Group.

After a strong start, European stocks slipped Wednesday after the rating agency Fitch lowered Portugal's sovereign credit rating one notch on budget concerns.

"First it was Greece, now Portugal, and the big question is who's next," Conroy said. "We've had a big run up in stocks on very light volume, and some of these debt concerns might force investors to take some chips off the table."

While jitters over the global economic recovery may trigger a 1% to 2% contraction in U.S. markets, Conroy doesn't anticipate a prolonged selloff.

"Investors will be looking for the next catalyst to push stocks higher. We're beginning to see signs of a steady housing market and the financial system is much healthier now than it was a year ago," he said.

Economy: Due out shortly after the start of trade are February new home sales data from the Census Bureau. Economists surveyed by Briefing.com expect a jump to a 315,000 annualized unit rate from a 305,000 annualized unit rate in January.

Before the market opens, the Commerce Department will report durable goods orders for February. Economists expect a rise of 0.5%, after a 2.6% increase the previous month. Durable goods excluding autos are expected to have risen 0.3% after falling 1% in January.

World markets: Asian stocks ended higher. In Japan, Tokyo's Nikkei index gained 0.4%, while the Hang Seng in Hong Kong added 0.1%.

In Europe, stocks got a strong start but fell after Portugal's credit rating fell. Britain's FTSE 100, France's CAC 40 and Germany's DAX were lower in midday trading.

The dollar and commodities: The dollar advanced against the euro, pound and yen.

Crude oil for May delivery slipped $1.35 to $80.56 a barrel. The Energy Information Administration releases its weekly crude oil supplies report at around 10:30 a.m. ET.

The price of gold for April delivery eased $8.70 an ounce to $1,095.00.

Treasurys: The price of the benchmark 10-year note fell slightly, pushing its yield up to 3.71%.