Global stocks drifted lower after housing data was less encouraging than expected on Wednesday and government debt prices rose as investors sought safety in less-risky assets.

Equities, which started the day flat, slipped after the data suggested a still-challenging environment in the housing sector despite signs of recovery.

Sales of existing U.S. homes slipped 0.9 percent to an annual rate of 4.59 million units, the National Association of Realtors said. But January's sales pace was revised up to 4.63 million units from a previously reported 4.57 million units.

The S&P 500 see-sawed near break-even, but some market participants viewed the dip as the start of a short-term pullback from a rally that has lasted for more than three months without a significant correction.

There are things that stood out today that made me believe this might be the start of a 2 (percent) to 4 percent correction - the relative weakness in energy and industrial stocks, and the reversal in financial stocks, said Seth Setrakian, co-head of U.S. equities at First New York Securities.

Investors usually wait for the start of a new quarter to take some money off the table. That tends to happen a little early when everyone is expecting the same thing.

Analysts expected the housing data to show an improving economy that would keep the Federal Reserve from launching a third round of a bond-buying program known as quantitative easing.

Falling unemployment and the potential for inflation could lead the Fed to start moving away from its near-zero interest rate policy as soon as this year, Narayana Kocherlakota, president of the Minneapolis Federal Reserve Bank, said on Tuesday.

Fed Chairman Ben Bernanke has said more bond purchases remain an option, and he has warned about removing stimulus from the economy too soon.

Investors are leery of further equity gains. Stocks are trading slightly above their historical valuations, while equity market fundamentals have lost momentum, Goldman Sachs said in a report.

The Dow Jones industrial average .DJI was down 22.07 points, or 0.17 percent, at 13,148.12. The Standard & Poor's 500 Index .SPX was down 0.47 points, or 0.03 percent, at 1,405.05. The Nasdaq Composite Index .IXIC was up 6.54 points, or 0.21 percent, at 3,080.69.

MSCI's all-country world equity index .MIWD00000PUS lost 0.2 percent, crimping a rally of more than 10 percent so far this year after reaching its highest level since August on Monday.

In Europe, the FTSEurofirst 300 index .FTEU3 of top regional shares fell slightly to close at a preliminary 1,091.74. Emerging markets .MSCIEF slipped 0.2 percent.

The U.S. dollar pared gains against the yen on the housing data. The dollar was down at 83.60 yen. The euro fell 0.2 percent against the dollar, trading at $1.3197.

U.S. Treasury debt prices rose as investors took advantage of a recent gain in yields to do some bargain-hunting, although price losses were limited by expectations that a better economic picture would continue to erode the value of government debt.

Treasuries prices plunged last week and yields solidly broke above ranges that had held for four and a half months, as recent data has pointed to an economic recovery that is gaining steam, lowering expectations of further economic stimulus from the Fed.

People are starting to price out the end of Fed support, said William Larkin, fixed income portfolio manager at Cabot Money Management in Salem, Massachusetts. Over time, it is likely that as the economy recovers and we get stronger and stronger economic data, that yields will continue to rise.

Benchmark 10-year Treasury notes were trading 17/32 higher in price to yield 2.30 percent, while 30-year bonds were 38/32 higher to yield 3.38 percent.

Brent oil fell 1 cent to $124.11 a barrel. U.S. light sweet crude oil rose 70 cents to $106.77 a barrel.