By Ryan Vlastelica
NEW YORK (Reuters) - Stocks were little changed on Wednesday, erasing losses as positive U.S. economic data offset worries about the euro zone's debt problems.
After a rally on 2012's first trading day on Tuesday, the stock market paused on worries that tight credit markets are making it expensive for European banks to raise capital and for euro-zone countries to refinance debt.
Europe's latest sign of stress came from Italy's biggest bank, UniCredit, which fell nearly 10 percent after it offered to sell 7.5 billion euros ($9.8 billion) in shares at a steep discount to shore up its balance sheet.
However, investor concerns were offset by data pointing to stronger growth domestically.
New orders for U.S. factory goods rose solidly in November, the government said, providing further evidence the economy is on track to recovery. But the data also showed business capital spending is cooling.
"The market is still teetering between European concerns and better economic data here in the U.S., so I'm not surprised to see this kind of volatility," said King Lip, chief investment officer at Baker Avenue Asset Management in San Francisco.
The Dow Jones industrial average was down 0.26 point at 12,397.12. The Standard & Poor's 500 Index was down 1.01 points, or 0.08 percent, at 1,276.05. The Nasdaq Composite Index was down 2.23 points, or 0.08 percent, at 2,646.49.
Financial shares remained lower, dropping alongside European banks. Morgan Stanley fell 1.2 percent to $15.89 while Regions Financial was off 1.8 percent to $4.27. Among European firms, Deutsche Bank fell 3 percent to $38.66 and Lloyds Banking Group was off 1.2 percent to $1.63.
"The possible depths of a European recession are troubling and probably haven't been fully discounted in U.S. shares, but we don't find the declines today to be anything concerning given yesterday's gains," said Eric Teal, chief investment officer at First Citizens Bancshares Inc in Raleigh, North Carolina.
Equities were down for much of the morning one day after a rally of more than 1 percent, which took the S&P 500 index to its highest level since October. Many traders cited profit-taking for Wednesday's initial decline as well as the uncertainty about Europe. The Dow briefly traded positive.
Yahoo Inc named PayPal President Scott Thompson as its chief executive, taking over on January 9 from interim CEO Tim Morse, who will resume his role as chief financial officer. Yahoo shares fell 2.4 percent to $15.87.
AT&T Inc agreed to pay TiVo Inc a minimum of $215 million and additional monthly licensing fees to settle a patent infringement dispute. AT&T shares gained 0.6 percent at $30.56, and TiVo jumped 10 percent to $9.82.
U.S. new vehicle sales showed automakers ended the year with strong sales, but they forecast lower growth in 2012.
General Motors Co U.S. sales in December rose 5 percent, while sales at Ford Motor Co and Chrysler jumped 10 percent and 37 percent, respectively.
GM shares rose 0.5 percent to $21.15, while Ford added 2.9 percent to $11.45.
(Reporting by Ryan Vlastelica; Editing by Kenneth Barry)
