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U.S. stocks were set for a flat open Wednesday, as investors digested disappointing housing numbers.
Investors also continue to weigh the impact of Japan's deadly earthquake and subsequent nuclear crisis, with other geopolitical tensions around the world.
Early Wednesday, Moody's Investors Service downgraded Portugal's credit rating from A1 to A3 -- a lower investment grade status. And Fitch downgraded Bahrain's debt to below investment grade, following a government clash with protestors.
U.S. stocks are coming off sharp losses Tuesday, as investors looked past a somewhat positive statement from the Federal Reserve, to focus on the deteriorating situation at Japan's Fukushima Daiichi nuclear power plant.
Investors, stunned by the devastation in Japan, had been reducing their exposure to risky assets and flocking to investments that are considered safe, including U.S. Treasuries. But the Wednesday rebound in Japanese stocks sent U.S. bond markets lower.
The Commerce Department reported that an annual rate of 479,000 new homes were built in February, down from a revised 618,000 in January.
Economists had expected the number of housing starts to rise to an annual rate of 575,000 units in the month, according to consensus estimates from economists.
Building permits -- considered a leading indicator of activity in the housing sector -- fell to an annual rate of 517,000 last month, down from a revised 563,000 in January.
Permits were expected to have increased slightly to 563,000.
Separately, the government's Producer Price Index showed that prices at the wholesale level jumped 1.6% in February, which was much more than expected. The PPI was forecast to show prices at the wholesale level increased 0.6% in February.
Core PPI, which excludes food and energy costs, increased by 0.2% in the month, matching expectations.
Oil prices -- which fell nearly 4% on Tuesday -- were higher early Wednesday, as concerns the ongoing turmoil in North Africa and the Middle East were revived. Oil for April delivery gained $1.80 to $98.98 a barrel.
Gold futures for April delivery climbed $11.10 to $1,403.90 an ounce.
The price on the benchmark 10-year U.S. Treasury was slightly higher, sending the yield ticking up to 3.3%.
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