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Stocks slip on Portugal credit woes - CNNMoney.com -- Stocks closed lower Wednesday as the dollar strengthened on fears tied to the growing fiscal crisis in Europe and a dour report on U.S. sales of new homes raised concerns about the economic recovery.

The Dow Jones industrial average fell 53 points, or 0.5%. The S&P 500 index slid 6 points, or 0.5%. The Nasdaq composite dropped 16 points, or 0.7%. All three indexes remain near the highest levels since late September 2008.

Stocks opened lower after ratings agency Fitch cut Portugal's sovereign credit rating one notch, reigniting concerns that the debt problems of struggling European economies like Greece are spreading and could hurt stronger members of the European Union.

The downgrade battered the euro, which fell to a 10-month low versus the dollar. The stronger greenback weighed on commodity prices, driving oil down 1.7%.

Stocks were also pressured by weaker-than-expected reports on new-home sales and durable goods orders. But analysts said the data are consistent with an economic recovery, albeit an uneven one.

Bank of America to cut some mortgage balances - Bank of America announced Wednesday that it will first look at reducing the loan balances of certain distressed homeowners with subprime or adjustable rate mortgages to make their payments more affordable.

The move makes Bank of America one of the first major loan servicers to systematically incorporate the controversial loan modification technique into its home retention program. Financial institutions, as well as the Obama administration, have come under increasing pressure in recent months to add principal reduction to their foreclosure prevention efforts.

Treasurys drop after auctions - CNNMoney.com -- Treasury prices continued falling on Wednesday after the latest auction of government debt.

What prices are doing: The benchmark 10-year note fell 1-7/32 to 98-9/32 and its yield rose to 3.84%. The 30-year bond fell 1-29/32 to 98-12/32 with a yield of 4.73%. Bond prices and yields move in opposite directions. The 5-year note fell 24/32 to 99-2/32 with a yield of 2.58%. The 2-year note was flat at 99-26/32 with a yield of 1.1%.

What's moving the market: U.S. debt prices fell after a $44 billion issue of 2-year notes on Tuesday and continued to fall after an auction of 5-year notes on Wednesday.