Stocks: New Year's rally fizzling

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NEW YORK (CNNMoney) -- Investors threw cold water on the New Year's rally, with U.S. stocks set for a modest pullback at Wednesday's open.

Dow Jones industrial average (INDU) and S&P 500 (SPX) futures were down 0.3%, while Nasdaq (COMP) futures were flat. Stock futures indicate the possible direction of the markets when they open at 9:30 a.m. ET.

Jitters surrounding Europe's debt crisis have resurfaced, leaving investors on edge. Uncertainty about Greece, along with reports that Spain might seek rescue funding, weighed on sentiment.

A spokeswoman for the Spanish government told CNN the reports were "a complete lie" and "radically false," and separately Greek officials said Tuesday that progress had been made.

"We're still watching Europe simmering now. We have another summit coming up and the problems are all still there," said Scott Brown, chief economist for Raymond James.

Europe: Still a huge pain for investors

European Union leaders hold their first summit of 2012 on Jan. 30. Political leaders hashed out a fiscal agreement in early December, but investors remain skeptical about how effective it will be.

Stocks rallied Tuesday following strong manufacturing reports from China, India and the United States.

Bank stocks -- one of last year's worst-performing sectors -- led the Dow higher in the prior session. Bank of America (BAC, Fortune 500), Citigroup (C, Fortune 500) and JPMorgan (JPM, Fortune 500) all posted strong gains.

World markets: European stocks fell in midday trading. Britain's FTSE 100 (UKX) lost 0.1%, while the DAX (DAX) in Germany shed 0.8% and France's CAC 40 (CAC40) slid 0.7%.

Asian markets finished mixed. The Nikkei (N225) gained 1.2%, while the Shanghai Composite (SHCOMP) fell 1.4% and the Hang Seng (HSI) lost 0.8%.

Economy: The Census Bureau will release data on factory orders for the month of November before the opening bell. Analysts surveyed by Briefing.com expect orders to have risen 2.1% in November, after dropping by 0.4% in October.

In the afternoon, the Commerce Department will release data on auto and truck sales for December. Auto sales stood at a 4.36 million annual rate in November, while truck sales were at a 5.98 million rate.

Companies: Before the opening bell, Yahoo (YHOO, Fortune 500) shares dropped 1.6% on reports that the search engine will name eBay's (EBAY, Fortune 500) PayPal President Scott Thompson as its new CEO. Shares of eBay fell 1.1%.

Caterpillar (CAT, Fortune 500) shares fell 1% in premarket trading, after the construction equipment manufacturer announced it will expand its research and development center in Wuxi, China.

Dunkin' Brands (DNKN) shares climbed 1.5% ahead of the bell, after the company announced it plans to double the number of its Dunkin' Donuts restaurants in the United States in the next 20 years. The chain currently operates about 7,000 restaurants nationwide.

Cabot Oil & Gas (COG) announced a two-for-one stock split, after its stock rallied 105% over the last year. The company also plans to increase its quarterly dividend 33%. Shares rose 3.3% in early trading.

Currencies and commodities: The dollar rose against the euro and British pound, but fell versus the Japanese yen.

Oil for February delivery slipped 70 cents to $102.26 a barrel.

Gold futures for February delivery fell $2.60 to $1,597.90 an ounce.

Bonds: The price on the benchmark 10-year U.S. Treasury fell, pushing the yield up to 1.96%.